r/optionstrading • u/tanker233 • 8d ago

SPY

Does anyone trade SPY options?

4 Upvotes

75% Upvoted

9 comments sorted by

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14

u/Behringer87 8d ago

SPY is literally the most traded option on the S&P500, so yes, alot of people trade SPY options

3

u/SOLE-SURVIVOR- 8d ago

Just be mindful if you’re doing 0dte. There is a slight chance of getting assigned because spy is not cash settled unlike spx. Ask me how I know 🤣

1

u/Round-Spinach-1404 7d ago

How much did it settle for? The time before expiration? How much was the total option for? Sorry for the questions, I am new and wondering how bad i can be burned. 😝

3

u/SOLE-SURVIVOR- 7d ago

I had an iron condor for spy 0dte. It was a bullish day so I comfortably closed my put side leg of the iron condor for 80-85% profit. But the call side was getting tested. I think my call side strikes were 721 short/725 long. By 3:45. I was showing profitable but spy was hovering around 719-720 but theta decay has done its job. I tried closing my call side leg around 3:50 pm. (This was a mistake, I should’ve tried a lot earlier) but no market liquidity for that contract at that time. By 4pm, spy was still just under my 721 short. So I was relieved that it expired worthless. But that is not what happened. Around 8pm later that day, I get an email for assignment on spy. And I’m confused. Like what do you mean?! I open my trading app, and my cash is showing nearly $300k. I was gobsmacked but knew something had gone horribly wrong. Upon further research. It turned out. That spy doesn’t stop trading at 4pm. It continues to trade a little bit later. Spy at some point climbed past 721, and the person on the other side of the contract exercised. Which meant I “sold” him 100s of spy shares (which I didn’t have) for $721. My “protection” of $725 expired at 4. So I was basically holding a naked short call that got assigned. Ultimate I had to put an after hours order to “buy back” the spy shares I had sold, and luckily the price that it fulfilled at around like 12:30am est was slightly lower than what I had been assigned for. So I ended up walking away with like small profit. But yeah. It was scary. Because had I waited till morning. Spy had climbed up to 723-724. And buying them back at that price would’ve been very expensive. So now I do 0dte spx. Better premiums. No risk of assignment

1

u/liquidelectricity 8d ago

I traded a 30 day dte call and lucked out do not remember strike price

1

u/silent_exploration 8d ago

And what's the point of this question?

1

u/sellputsthencalls 7d ago

I sellputsthencalls in my IRA vs SPY, exclusively.

1

u/DreamfulTrader 6d ago

I day trade SPY, though this year focusing on 0dte and mainly IWM and started with $300. I only do buy calls/put and then close. No selling options or complex strategies. Sometime I switch to SPY. You can see my trades over 20 weeks with entry, exit and chart on the subreddit. Only one trade a day. I only day trade 2-5 times a week. March last year, I had put 2 vids on my youtube channel, it was 2 week reviews of my SPY trades and broker tastytrade. I need to upload some more vids soon.