I watched Dan Harvey's presentation of his SPY put diagonal trade and that reminded me of another trade done by Ryan Jones
Dan was saying he tried just about every version of the diagonals so I wanted to ask him or anyone else who knows what is the opinion of Ryan Jones and his spy CALL diagonal trade
This is not an example from him but it's very similar Buy the spy 242 call with may 26 expiration and sell the 241 call with the may 19 expiration
for 0.14 cents for one lot or $140 for 10 lot and $1000 for margin and make even more if SPY stays where it is or goes slightly higher
This is completely protected on the downside so the only risk is on the upside
The only problem I see is that in this low vol market the spread is too close so it would not take much to put this trade in jeopardy but because of the slow decay in the expiration line you would not loose as much if this was a regular vertical
He has some other rules for setting it up but that is the basic shape of it
Probably works well at the end of a bull market or in a higher vol market so I would say it would have a limited use in the current market
I was wondering if anyone has any opinion on this type of trade ?
Yes, I am familiar with the Ryan Jones trade you mentioned. It's a good one, but works best in the circumstances you describe. As you know, there are many ways to set up time spreads. The choice depends on trader directional bias, volatility considerations, and risk tolerance. As I pointed out in one of the videos, my setups is probably not the "best", but it is attractive to me because it has a reasonable degree on consistency when volatility is relatively low and can reap rapid rewards if a vol pop occurs and premium bleeds out of the front leg. Downside risk (excluding a black swan event) is covered by the GTC OCO order to close the short leg, leaving the short delta long vega back leg in place. Upside risk is usually gradual, and the position can be closed or adjusted depending on DTE. That being said, I like his trade setup and have used it in the past.