is scalping spy weekly option possible?

If you buy something and it goes up $1, does it turn into a risk free trade if you put in a stop at entry? You can still lose your unrealized gain.

If dest bothers to reply he’ll point out that short spot/long call is a synthetic put. The gymnastics are irrelevant. 1 DTE SPX gamma isn’t systemically underpriced.. there’s no edge here. If you want to scalp 3 points long just buy spot and sell it 3 points higher. If you want -delta with limited risk afterward either buy a put or short spot with a stop. Makes no difference.
 
But if you bought spot along with a put instead of using the long call to start off the trade now we’re talking (jk)
 
It is interesting to see all of the people who have NOT traded this way, stating "it can't be done."
It can be done. That is, if you are defining "scalping" as very short-term trading, not bid-ask capture.
 
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It's back to school season and that's what I've done in this matter. Gold star or demerit...

This "no-risk" trade thing is a married call (or married put dependent on your directional bias of the underlying). It's purpose is "protection", and as such, rightfully, has little to no "edge" as it's called, other than the supposed "edge" associated with the reasoning for the directional bias.

What is different however, is that THIS "no-risk" trade is placed on weekly option expiration day, and will be flattened on expiration day (same day). Adverse valuation from time decay is minimal at worst, as the option trades at, or very near 1:1 to the underlying, perhaps from the outset. Greeks are not (very) useful, even less as the day progresses. A reminder: as layed out, the trade does not use "equivalence" instruments. If trading ES contracts, ES options are used, not some look-alike. 100% fungible derivatives would work but why muddy up the simplicity!

Anyway, I see the trade as a simple mostly passive trade with clearly defined risk. Put it on at the open, if filled, take it off before the close. Set and forget. Unlike a stop where the position is flattened, the original position can be held. A once a week opportunity with little re-focus necessary though out the day, if filled.

Thanks for the discussion!
 
destriero said:
Think about it as a synthetic (which it is; fungible, equivalent). Calls are puts, puts are calls, just add spot. The order of what is traded when, doesn't matter, nor does the intent.

He's buying a call and shorting futures. It's a 1545 synthetic long put from 1.5. Assuming an initial 50D and zero gamma, theta (ease of discussion).

It's not riskless. The dude made 1.5 per contract. Held to the bell? Loses 1.5 above 1545 and futures gains on short under 1543.5.
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Thanks for the input D! Just saw your post.

The posting order doesn't match the post times. LOL

Yea.. Not riskless. 1.5 loss possible. Author mentions, but glosses over any futures gains being reduced by 1.5 as well. Nonetheless, it's a simple once a week strat, IMO.

Thinking about last Thursday... **IF** it was a weekly opt expiration day and this strat employed at the open, would the broker/fcm have allowed it to be held until close?? :)
 
It’s a synthetic long put as Magic stated above.

The writer doesn’t understand synthetics. The opportunity gains on the futures do not equal the gains on the call. Assuming 50D he earns ~1.5 on the call. The trader now owns a synthetic 1545P from 1.5. Risk-less? No.

The marked value of the 1545P is the risk on the position. GIGO. The guy infers it’s risk-less so he’s clueless.
 
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tiddlywinks said:
Thanks for the input D! Just saw your post.

The posting order doesn't match the post times. LOL

Yea.. Not riskless. 1.5 loss possible. Author mentions, but glosses over any futures gains being reduced by 1.5 as well. Nonetheless, it's a simple once a week strat, IMO.

Thinking about last Thursday... **IF** it was a weekly opt expiration day and this strat employed at the open, would the broker/fcm have allowed it to be held until close?? :)
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He doesn’t understand that the three buck gain in futures is not a three buck gain in the option. The value of the 1545P dictates the risk in the position as the futures enter the equation.

Puts are calls, calls are puts, just add spot.

I would think that any FCM would allow the trade as it is essentially a 1.50 outlay, unless it’s a intraday haircut position. Places like AMP won’t allow options on their meth accounts.
 
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destriero said:
He doesn’t understand that the three buck gain in futures is not a three buck gain in the option. The value of the 1545P dictates the risk in the position as the futures enter the equation.

Puts are calls, calls are puts, just add spot.

I would think that any FCM would allow the trade as it is essentially a 1.50 outlay, unless it’s a intraday haircut position. Places like AMP won’t allow options on their meth accounts.
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Thanks again for the input D. Always appreciated. ET would suffer withoutcha!

I need a new handle... MisterMeth. :)
 
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