SPDR S&P 500 (SPY)

[learningboutinv]

Two,

Yes, the more put to call the greater the event. R3 typically represents a down market within 1-3 days. They are super tough to trade unless you are good and fast. The last R3 was a non-event unless you're a day-trader on the 1min chart. Gap up in the morning of 10/22 then followed by down, it filled the gap on all major indexes to the downside and by the afternoon and end of the day all indexes closed up/green.

I tried trading the up/down/up rule this past August but it's just so hard. You need like 3 computers and fingers at the trigger. The moves are fast and I was stuck holding a short position that didn't pan out well. Took a $1.5K loss on that because I thought the next day we'd go down because the rule states that if it's up/down/up the next day will trade in the opposite of the close which should've been down. Well the next day all it did was consolidate and so I closed the position with a loss.