![SPY Options Trade [Lottery Trade] - Here's How To Do It](https://i.ytimg.com/vi/M5iTcr_m7Mg/maxresdefault.jpg "SPY Options Trade [Lottery Trade] - Here's How To Do It")
SPY options trades today are lottery trades. Here's hot to do the options lotto trade. Only try it on call options today. Try our research for $29 Options lottery trades take place on the last day of options expiration. These options trade for pennies and they have the potential to generate huge returns of 100%, 200% or more in a matter of minutes. Options lottery trades require extreme patience and discipline. Options traders can make a lot of money with this options trading strategy.
Today the market is trapped in a tight trading range and there is very little momentum either way. The good news is that the momentum has been excellent this week and there is a stiff upward tailwind on a longer-term basis. The market is making a new all-time high today and that also helps. I believe that later this afternoon buyers will be able to push the market through the high of the day and that will present an option lottery trade opportunity. Options are a wasting asset and time decay is extremely accelerated in the last hours before the options expire. There will be many head fakes during the day and that will lure novice traders into positions that will lose money.
I do trade the SPY calls and puts, but stocks often provide better opportunities. In a flat market there are stocks that have good option liquidity and extremely high volume with strong momentum during the day. I like stocks that have nice tight upward sloping trading channels and that have been unwavering even when the market dips. This is the ultimate sign of relative strength and it demonstrates that buyers are aggressive. The stock needs to demonstrate that it can get through the strike price that I want to buy calls on. Once it pokes through that level I have a higher degree of confidence knowing that it will be able to get through that level again.
In a case where the market is rallying in the last hour of trading, bullish speculators pile in. They're all looking for a closing move higher and they are vulnerable to a market pullback. When the market dips they are forced to exit their positions because they don't have the margin to hold overnight. This little round of selling provides the window of opportunity I’m looking for. Often I will buy call options that are just out of the money for pennies knowing that the stock has a good chance of running through that strike price because it's already done so earlier in the day. Once the options go in the money, they start trading at intrinsic value and Market Makers can't play games with the option premiums. I like to place a sell order at twice the price that I bought the options for and I exit half of the position. That makes the other half of the position very easy to manage. Trading can get hectic in the last 5 minutes and I typically don't do more than one or two of these plays because they require my utmost attention.
Option Stalker helps me find these stocks. I am looking for option liquidity, strong upward momentum, a tight trading channel, a volume spike on a 15 minute basis and I want the stock to be near it's high of the day. I am able to search for all of these variables and there are usually a handful of excellent prospects to choose from every options expiration.
I mentioned that a strong market tailwind is critical. Without it, the stock will not have enough fuel to push through the strike price late in the day. Everything has to line up perfectly for these option lotto trades or they will lose money. Not every option expiration is conducive for this trade. That is where novice traders will fail. They will enter option lottery trades early and they will not have the patience to wait. On every little headfake bounce they will be ready to pull the trigger and the move will quickly fade, leaving them with a losing position. This is a low probability trade, but you can improve your odds of success through patience. You have to be willing to let a lot of good winners go by knowing that you will catch the next one. If you start jumping on every trade, you will lose money. You have to be extremely selective. The nice thing is that once these options start to move, they fly higher and it is a very exciting options trading strategy. Today we might see some nice opportunities and stocks like AMD, MCD and YUM look like they are setting up well.
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