Buying SPY Call Options

Buying SPY Call Options | Mondays

This SPY call buying strategy research reveals an edge by combining Alpha Crunching's WTR (Weekly Triumph Rate) with the 20sma and RSI for trading long call options with 7 days to expiration on Mondays. Strike selection and trade management also play a roll in this strategy's performance by offering a 2:1 risk reward

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Alpha Crunching considers each day of the week of having its own characteristics and seasonality. This research takes trades on Monday afternoon if the following criteria is met.

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Alpha Crunching's WTR or Weekly Triumph Rate is updated each weekend before the trading week begins and shows the historical percentage of times SPX has closed higher 7 days later over the past two months.

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For Mondays, if the WTR is above 50% or below 50% and increasing from the previous week as shown above, then buying an SPY call option towards Monday's close is a potential trade candidate.

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For bullish confirmation, SPY needs to be above its 20sma on the daily chart about 30m before the close that Monday before taking this trade. If SPY is below its 20sma, the trade is skipped. We also don't want the RSI(14) on the SPY daily chart to be above 70 indicating an overbought condition. If the RSI(14) is above 70, then the trade would be skipped.

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This strategy buys a Delta 70 call option on SPY with 7DTE(days to expiration). This strategy uses a 50% Stop Loss and 100% Profit Target creating a favorable 2:1 risk reward.

Note: To avoid any assignment risk, it is recommended to close the trade prior to expiration if the stop loss or profit target has not been hit. Do not let the option expire ITM(in the money).

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This SPY options strategy has a 53% win rate from June 2022 through December 2024 in which the winning trades are almost twice the size of the losing trades. The historical backtest above uses a $50,000 account allocation 3% per trade. This is not a recommendation but gives you a reference point of allocation to start with.

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In this example, an allocation of 3% shows a CAGR of 11% per year during this lookback period and highlights the power of leveraging SPY call options during bullish conditions in a systematic way.

To make it even easier, Alpha Crunching provides a list of backtested trade ideas each week before the trading week begins so you know what to focus on in the upcoming week. The Trade Ideas tab is updated every Sunday and includes this SPY Call buying strategy when the data supports it. It even reminds you of the time of day and the technical conditions to be met prior to entry. As you can see, we refer to this strategy as the SPY WTR 7DTE Long Call strategy on the Trade Ideas tab.

If you click on any of the Trade Ideas, you'll get more details for each trade as a reminder of the strategy which includes a link to a blog post so you can see the most recent historical backtest.

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Here at Alpha Crunching, we've tried to take the guess work out of finding and implementing backtested strategies so you don't have to watch the market all day.

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Ready to Take This Strategy to the Next Level?

By now, you’ve seen how the Weekly Triumph Rate can help you identify high-probability SPY call trades with confidence. But if you’re serious about mastering this approach and want to dive even deeper, I’ve created a mini video course designed just for you.

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Turn the S&P 500's growth into your advantage with this simple SPY call option strategy in only 15m per week.

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A simple strategy requiring just 15 minutes of trading one day per week.

Proven results with clear risk management, designed for both small and large accounts.

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This course is perfect for traders who want a deeper understanding and the confidence to implement this strategy week after week.

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Click Here to learn more and start the course today. Let’s take your trading to the next level!

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