Beating The S&P500

OVERVIEW

2 min readMay 10, 2024

Goal: My primary objective for the year 2024 is to actively engage in trading with the aim of achieving a higher year-to-date return than that of the S&P 500 ($SPY). While the year-to-date return for $SPY fluctuates daily, the overarching goal is to consistently “beat the market.” To accomplish this, I intend to meticulously track $SPY’s returns while actively trading, striving to outperform its performance.

Strategy: My strategy revolves around leveraging the appreciation potential of option derivatives and common stock shares to surpass the performance of $SPY. A detailed breakdown of my approach is elucidated below. The foundation of my trading decisions lies in technical analysis, encompassing factors such as supply, demand, liquidity zones, and other pertinent information to forecast price movements.

Options: I will primarily utilize short-term expiry options, capitalizing on heightened market sentiment and volatility to secure profits. These options will predominantly be Out of The Money (OTM) and will typically expire within a timeframe ranging from 0 days to a maximum of one month, unless otherwise specified.

Stock Shares: In certain circumstances, I may opt to acquire direct shares instead of options, either as a hedge against a position or to capitalize on potential capital appreciation. However, it’s crucial to acknowledge that while this approach may not yield the same level of returns as options, it serves as a prudent method for hedging risk and preserving capital gains.

Limitations/Considerations: It’s imperative to recognize that even in the event of surpassing the year-to-date returns of $SPY, such accomplishment does not guarantee consistent success over an extended period. To assert otherwise would be both impractical and presumptuous. It’s essential to approach trading with a pragmatic mindset, acknowledging the inherent uncertainties and fluctuations of the market.