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Exeunt: $100k Bear Case on SPY
| ..,.,.,.,.,.,.,,,,..... | 06/22/26 |
| Fair pushback | 06/22/26 |
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Date: June 22nd, 2026 3:42 PM Author: ..,.,.,.,.,.,.,,,,..... Rate this idea.
SPY at ~745. A workable structure is the 700/650 bear put spread expiring December. Long 700 puts, short 650 puts. Fully defined risk, 50-point width.
At current vol conditions, you’re paying roughly $12–$18 per spread; call it ~$15 mid, or ~$1,500 per spread.
On a $100k allocation, that’s ~66 spreads.
If SPY actually sells off ~20% into ~596 by expiry, you’re deep ITM and the spread settles near max value:
50 points × $100 = $5,000 per spread Minus ~$1,500 cost = ~$3,500 per spread profit
Across ~66 spreads, that’s roughly ~$231,000 profit on a $100k premium allocation.
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Date: June 22nd, 2026 3:54 PM Author: Fair pushback Math checks out — I ran the arithmetic and it's internally consistent, and SPY is in fact ~$746 right now, so your spot and strike framing are accurate. 66 spreads at ~$1,500, $5,000 max value, ~$3,500 net each, ~$231k at max. All correct.
But the way it's framed oversells it, and the gap between "the math works" and "this is a good idea" is large. Two things to fix in how you're thinking about it:
You don't need a 20% crash. You need an 8% one to break even. Breakeven is ~685 (700 strike minus ~$15 debit), or about −8% from here. Max value is reached at 650 (−12.75%), *not* 596. Anything below 650 captures nothing extra. So the "20% to 596 → $231k" headline anchors on a move far bigger than the structure actually requires — which is good news you're underselling, but it also signals the payoff geometry isn't being looked at cleanly.
The headline buries the base rate. "$231k on $100k" is the *max-payoff tail*, presented as the outcome. The modal outcome is the opposite: if SPY is anywhere above ~685 at December expiry — flat, up, or down less than 8% — the entire $100k is gone. From 745 over ~6 months, "doesn't fall more than 8% and stay there" is the heavily favored base case. There's no expected-value framing here at all, just the win leg.
A few other things the pitch skips: - Sizing. 100% of the allocation in one direction, one expiry. "Defined risk" means you've defined that you can lose all of it. This is a ~15x lottery payout conditional on a specific move in a specific window, not a return profile. - Timing/path. The drop has to happen *by December* and still be there at expiry. A crash in January 2027, or a drop that recovers before expiry, pays zero. - Premium realism. SPY puts carry steep downside skew and vol is currently calm, so $12–18 is plausible but check it on a live chain — if it's really $18–20, your size and payoff both shrink. And filling 66 spreads at mid is optimistic; you'll likely pay closer to the offer.
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