Did you see this divergence on SPY right at the start of the day on October 13, 2022?

Oct 17, 2022

Prices dropped sharply on SPY in the first hour of trading on October 13, 2022. The MACD on the hourly chart clearly shows SPY should be higher in price

The hourly divergence on the 13th showed us prices should be higher.

Time to look for some calls expiring the next day . We want low premiums so we want:

  • Out of the money options
  • Trading at less than 10c
  • Expiring as soon as possible (October 14th)

In the first hour of October 13, SPY was trading at 348. nearby out of the money options in the 348 - 368 range were over 10c. Options too far out of the money like 380 or above have insufficient time to gain headway.

We selected a middle ground and bought the SPY 370 calls expiring October 14th, for under 10c. The 15 minute chart shows the SPY 370 calls expiring October 14th trading up as high as 1.60 with an entry under 5c during the day on October 13.

Over 10 times your money in one morning

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