Can someone help me understand is there a limit to how high the price of SPY can go? I firmly believe in 7dte call options on spy because I feel like over 7 days it will eventually break even or even better make a profit. But how long can this last? How long will spy rise before it reaches a limit? $1000? $2000? $10,000?
Posted by Agile_Pen_9953
9 Comments
The index triggers the level 3 circuit breaker when it moves up or down 20% from the prior day’s close. Is that what you mean?
To some level of course. But as long as people work and contribute to the economy it’s going to keep increasing. Also their 401k contributions will typically be invested into s&p 500 etf’s and mutual funds which creates almost natural support level for the S&P.
I mean SPX will keep rising, they may eventually split it but doubtful. They may split spy IE if SPX hits $10,000 they may make SPY a 1/100 and have it at $100 and do a 10 for one split.
With that being said please don’t trade options if you don’t understand how this works.
SPY specifically is an ETF with shares and all. So split could be done, usually they will only bother if it hits like $900+ per share
SPY doesn’t have a specific limit, but it’s tied to the S&P 500, which reflects the broader market. In theory, SPY can keep rising as long as the overall market grows. But keep in mind, it won’t rise forever without corrections or pullbacks. Betting on 7DTE calls can be profitable during upward trends, but markets are unpredictable, and it’s important to consider risk management for when those pullbacks happen.
Considering the P/E ratio of SPY right now is only 27, I would say there is still runway left.
This is compared to 39 back in 2020
Spy is an etf that is managed to invest in the s&p 500. It closely traces the snp stock trajectory, and will continue to grow as long as the portfolio is invested in the right snp stocks.
I am scared that someone asking this question is allowed to gamble away their savings on derivatives without understanding the risks involved.
It will raise until I bought calls