SPX Plays
Technical Analysis 101
Learn to read charts, trends, and key indicators
Master the fundamentals of options trading. Learn calls, puts, the Greeks, risk management, and proven strategies for trading SPY and SPX options.
This comprehensive guide covers everything you need to start trading options successfully.
Options are contracts that give you the right (not obligation) to buy or sell a stock at a specific price by a specific date.
Right to BUY at strike price
(Bullish position)
Right to SELL at strike price
(Bearish position)
The price at which you can buy/sell the underlying asset
The cost you pay to purchase the option contract
The date when the option contract expires and becomes worthless if not exercised
Option has intrinsic value
Option only has extrinsic (time) value
Stock price β Strike price
When we post an alert, here's what it means:
Options contracts = 100 shares
$2.50 per share Γ 100 shares = $250 total cost
The Greeks measure how options prices change based on different factors. Understanding them is crucial for successful options trading.
Measures price movement per $1 stock move
Measures time decay per day
Measures how fast delta changes
Measures sensitivity to volatility changes
Market's expectation of future volatility:
Theta (time decay) works against you every single day. Factor this into every trade decision.
Proper position sizing is the #1 factor that separates successful traders from those who blow up.
Set your stop loss at entry, not during the trade.
Mental stop losses don't work. Emotions take over when you're down.
Recommended: 20-30% max loss per trade. Set it and honor it.
Taking consistent 30% gains beats chasing 10-baggers and losing everything trying.
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Before risking real money, paper trade for at least 1 month. If you can't be profitable on paper, you won't be profitable with real money.
Paper trading removes emotional pressure and lets you learn mechanics without financial consequences. Most traders skip this step and pay thousands in "market tuition" learning the hard way.
Your options education is an ongoing journey. Markets evolve, strategies adapt, and there's always more to learn. Here are some free ways to keep sharpening your edge.
Bookmark Reuters, Bloomberg, or CNBC for breaking market news. Knowing what's moving markets helps you anticipate volatility before it hits your positions.
The trading community on X is massive. Follow experienced traders, economists, and analysts for real-time market commentary and trade ideas.
TradingView is free and packed with featuresβcharting, screening, and a huge community sharing setups. Essential for technical analysis.
Track Fed meetings, CPI, jobs reports, and earnings dates. These events move markets hardβnever get caught off guard.
Our free tool to quickly translate between SPY and SPX strikes when planning trades.
The official options exchange has solid free courses and webinars. Straight from the source.
Most brokers (Schwab, Fidelity, Robinhood) have built-in education, scanners, and paper trading. Use what you're already paying for.
Free option chains, earnings calendars, and basic screening. Simple but effective for quick research.
The best traders never stop learning. Dedicate 15-30 minutes daily to reading, watching, or reviewing your trades.
Options are contracts that give you the right to buy (call) or sell (put) a stock at a specific price by a specific date. They're leveraged instruments that can amplify gains but also increase risk.
While you can start with $500-1,000, we recommend $2,000-3,000 minimum to properly manage risk and take multiple positions without going all-in on single trades.
The Greeks (Delta, Theta, Gamma, Vega) measure how options prices change based on stock movement, time decay, and volatility. Understanding them is crucial for successful options trading.
Yes. Paper trade for at least 1-2 months to learn mechanics, test strategies, and build confidence without risking capital.
SPY is an ETF (equity settled, can be exercised early) while SPX is an index (cash settled, European style). SPX has tax advantages and larger contract sizes.
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Less than one winning trade
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