A new strategy! Had a long conversation with my brother last couple days talking about my SPX strategy. (@bikeeagle1 on here) He doesn’t trade options much but understands them very well. After explaining everything and doing a lot of “hangar flying” he came up with an alternate idea. Higher initial cost but much less if any downside risk.

Basically, it’s this. Where will the 200 day moving average be in about a year taking into account a continuation of the last couple years? The number we came up with was around 7000.

So…buy a 7000 strike put at that level. We originally looked at just a year out but decided for minimal extra cost to go out to 2029 to have some extra time just in case. Then, like my positions, sell daily against it.

This will result in quite a bit more out of pocket but, at least for now, zero risk to the downside. The goal with the daily selling is to be pretty aggressive and try to get the entire cost covered well before the market might get to 7000. With no downside risk selling daily in the money is a viable option depending on how aggressive you want to be.

I went ahead and threw one on in my real account to see how it plays out. I look at it as a nicer rental house in a nicer area with higher rents. LOL!

Bought to Open SPX Dec 21 2029 7000.0 Put @ 885.0

Sold SPX Feb 26 2025 6000.0 Put @ 33.00