Spy-T trading is a style of options trading that uses signals from the spytomorrow.com website. A Spy-T trade is an overnight swing trade using a 2 to 1 ratio of options trade based on the provided signals. Signals are available to members about 5 to 10 minutes before the market closes at 4 PM EST. Up and down signals are shared free on the front page of spytomorrow.com, after market close.
SPY-T trading offers a high probability of profit potential to build wealth over time. The Spy Tomorrow indicators are correct over 50% of the time. Each month is different, however, the average correct rate using our current model is about 77%. Some months are as low as 65% and as high as 85%.
Plus, with our confidence indicators for members, traders can adjust position sizes based on confidence levels.
If the SPYtomorrow.com indicator shows up pressure a SPY-T trader would purchase 2 Calls and 1 Put for insurance. For example, you could trade 2 SPY Calls at $2 ($200 each) with an expiration of about 3 days and 1 SPY Put for $2 ($200) with an expiration of 3 days. Both options are usually at or near the money. This method allows for solid upside with protection on the downside.
If the confidence level is low, a trader doesn’t have to trade (although recommended), a lower position size trade can be placed or longer option expiration can be a more defensive move.
It’s basic math. When you limit your down side risk, yet allow for greater gains and your trade is correct more often than not, over time your portfolio wins.
Even if the market pressure changes over night, you can still make money. With practice and skill you can sell your Put (or insurance option) on the downside and follow your Calls back up, if the market moves in a positive direction.
If Spy Tomorrow is correct, you can add to your gains by selling your 2 Calls for a profit and following you option Put down, if the market reverses direction.
Either way, we recommend stop losses to protect your gains and minimize your losses.
It’s also important to evaluate your risk tolerance. Would you be OK with a 20% loss with the opportunity for gains later or would you freak out. Ask yourself the hard questions and place your position sizes (percent of the portfolio) appropriately. Maybe consider paper trading before you use real money.
Do you have to use spytomorrow.com signals for SPY-T trading? The short answer is yes, for SPY-T trading. However, you can use any signal you wish to swing trade overnight or any period of time. SPY-T is a specific type of swing trade using a specific time frame, options ratio, and signal.
Options trading can be very complex. Different members use the signals with various approaches to trading the market. Some methods are riskier than others. SPY-T is the endorsed method for the Spy Tomorrow community, however, it’s certainly not the only method.
The biggest danger to this and any trading method is trader emotion. If you make a mistake, or news changed the market pressure overnight, perhaps you got out of a trade too early. Trying to fix mistakes and errors can be costly.
We recommend trading the options you held overnight and move on with your day. Don’t worry about what could have happened, how it might have been better, or your loss. There are always losing days. The better you handle them with balance the greater success you will have in the long run.
Good luck!
