The SPY PUT Diagonal is a positive Vega, approximately Delta neutral trade using very liquid SPY puts.
Profits are generated by time decay of the front leg and/or falling price of SPY with rising volatility.
The risk graph is optimzed at trade launch.
Front leg and back legs move indepedently so current profit or loss is costantly changing.
Profit may move from slightly positive o healthy profit in a single day. The converse is also true.
- The front leg starts 10 to 15 days to expiraton (DTE) while the back leg starts from 40 to 50 days to expiration (DTE).
- Strikes are separated by two or three points
- Final setup is determined by risk graph configuration.
WHAT IS INCLUDED
The SPY PUT Diagonal Trade Alerts inludes everything you need to learn how Dan Harvey trades the SPY PUT Diagonal trade.
REAL TIME TRADE ALERTS
All working orders and fills are sent to you via email and/or SMS text message in real time as Dan trades
WEEKLY RECAP VIDO
Watch a video of what happened in the past week and Dan's plans for the following week.
DAILY TRADE IMAGES
A screen capture of the current trade is uploaded after each trading day.
PRIVATE DISCUSSION FOUMS
Ask Dan and other subscribers questions about the SPY PUT Diagonal trade.
ALL WEBINARS ARE RECORDED
All webinars and videos are archived for you to watch as many times as you want.
GETTING STARTED VIDEOS
Dan is preparing getting started videos to help you undertand he trade and how to setup Thinkorswim and Interactive Brokers one-cancels-all orders.
“ Dan is an excellent mentor and you will learn a great deal. Its not just 'trade alerts' but the education that goes with it.”
Greg R - Canada
NOTE: Dan Harvey has been trading this strategy since August of 2016. The results shown are since the trade alerts service started. Results prior to the service startng were approximately 60% yield on an average of $4,000 of margin per trade in appoximately eight months of live trading.
Frequently Asked Questions
What is the margin required for one trade?
Each SPY PUT Diagonal trade typically requires approximately $4,000 in margin. We recommend having a buffer and using approximately a $15,000 account so you have cash available for adjustments if needed.
Can I get filled at your trade alert filled prices?
Some traders will get the same fills we do. Others may not.
Here is our sequence for selecting the trade. First, we experiment with two to four combinations of strikes which we think would have excellent returns with manageable risk. Then, we watch the mid prices of these possible trades and how the prices move with the market. Then, we select the one we think is the best (and with a reasonable price) and send a "working order" alert. If the order is filled, we copy and paste the fill and send it as an alert as soon as we can. This is usually within a few minutes of the fill.
The key point: GET FILLED.
The only scenario in which you might want to pass is one in which you can't get filled even at two cents above our fill. Yes, you will give a little to the market maker, but these trades have a high win rate, excellent expectancy, and some of the best yields we have experienced when taken in context with the simplicity of the strategy, its low draw downs, and its relatively few adjustments.
Are the trades based on real trading or simulated trading?
Real trading. Dan and Tom both trade the RTT for their own accounts for for client accounts. The trade alerts we post for the class are one of Dan's live account trades.
Are the trades recorded?
Yes. All trades are fully documented and available to you as long as you are a subscriber. This includes the daily screen shot images, trade messages, and emails we send out. Trial members can only look back 30-days. Paid subscribers have no limitation on how far back in time they can go.
Are the real time alerts sent out before or after you are filled?
Before. We send emails and/or SMS text messages to alert subscribers we are going to enter a trade. As soon as we put the trade on, we alert the subscribers that we have a working, or open, order. When the order fills or we cancel it, we send another message notifying subscribers of what we did.
Can this strategy be used on other underlying instruments besides SPY?
Yes. We haven't tested it but there's no reason it shouldn't work with SPX or ES futures options.
Trade alerts in this service are made in real time in a ThinkOrSwim live account with Reg-T margin. The normal entry size is a 15-lot of SPY options which requires approximately $4,000 of planned capital. The purpose of the service is for you to watch professional traders trade a live account so you can learn how to do it yourself by following along and asking questions.
Capital Discussions, Dan Harvey and Tom Nunamaker are not broker dealers or investment advisors. The Road Trip Trade Alerts are NOT trade recommendations. We don't know you or your situation and have no way of knowing what level of risk is appropriate for you. You have to make your own trading decisions.
The risk of loss in trading options can be substantial so please be aware of all of your risks prior to placing any live trades.