I see a lot of discussion here around directional options failing, especially short-dated SPY/SPX trades that look great on paper but blow up in real life.

    Directional trades should be selective, structured, and backed by data, not daily adrenaline trades or indicators that have a high degree of failure.

    There are publicly available Quants on SPX (or SPY) that give nice clues to where the market is heading in case of a "certain" event. Certain events repeat themselves. If you find high probability events (>80%) that will occur in a certain timeframe it will give a trading opportunity…

    For example, "if SPX gaps down > -0.5% and finishes the day up >1%, it will be higher 3 months later 100% of the time (10 observations)". This means we can play with a Bull Vertical 3 months out… or wait for a small correction to increase the odds…

    Directional options trades (like Verticals) can work if you have a statistical edge
    byu/DeltaNeutraltrading inoptions



    Posted by DeltaNeutraltrading

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