I Found a 10% Edge on SPY

(Here's The Math)

Author

Don Kaufman
September 08, 2025

Hey there, it’s Blake. 

When the market hands you a 10% statistical advantage, you don't ask questions - you take it.

That's exactly what happened Friday when I was running my monkey bar analysis on SPY. 

Three different timeframes screaming the same thing: we're at fair price. Year, month, week - all lined up like planets in some cosmic trading alignment.

And then I saw the options pricing.

The Setup That Made Me Stop Everything

SPY sitting at fair price after five straight weeks of being overbought for the year. Meanwhile, mortgage delinquencies are slowly ticking higher every month. 

JOLTS data is the worst it's been since 2021.

But here's the thing about markets - they can stay disconnected from reality for "days, weeks, months, quarters, and even years." 

Just ask anyone who tried to short in 2007 when mortgage delinquencies hit 25-year highs. The market kept climbing for another year.

So when everything lines up, you don't fight it. You sell premium.

The Math That Changed My Week

I pulled up the Friday SPY options and built a simple short call vertical - selling the 651 call and buying the 652 call for a $1 wide spread.

The market was offering me 45 cents in premium.

  • Premium collected: $0.45

  • Risk per spread: $0.55

  • Breakeven requirement: 55% win rate

Standard stuff. But then I looked at the delta I was selling: 40.

When Probability Gets Stupid

When you sell a 40 delta option, the market is telling you there's a 60% chance that option expires worthless.

Do you see what just happened?

  • Market says I'll win: 60% of the time

  • I only need to win: 55% of the time

  • My edge: 5% on max profit

When I ran the full breakeven analysis: 64% probability versus my 55% requirement. That's a 9% edge just to break even.

This is the kind of setup that makes you check your math three times.

Why This Edge Existed

We're sitting at yearly, monthly, AND weekly fair price after five weeks overbought. 

Plus, implied volatility was higher for Friday expiration (13%) than Monday/Tuesday (11%). The market was paying me bonus premium for weekly uncertainty.

The SPY had to break out of yearly highs, monthly highs, AND weekly highs, then close above 651 for me to lose maximum money. Meanwhile, I'm collecting premium at the exact level where three timeframes are saying "this is where we take profits."

What This Really Means

Most traders are trying to pick direction in a market climbing a wall of worry. They're buying calls on AI names or catching falling knives.

But sometimes the best trade isn't about direction. It's about finding spots where the probability math is so skewed in your favor that you'd be stupid not to take it.

When the market hands you a 10% edge, you don't overthink it.

You take it.

Blake Young

Don's going nuclear on Wednesday

He's dropping the timing system that won $230,000 in a courtroom.

Not some feel-good trading story. Real money. Real case. Real system.

The same signals he used to convince a judge and jury are the ones separating winners from the walking wounded in this market.

Here's what you'll see:

The exact timing intel that lawyers paid six figures to understand

When retail money turns into smart money (and how to ride the flip)

How to stop getting your face ripped off by terrible timing

Most traders think timing is luck.

It's not.

There are invisible clocks running this market. The pros see them. You don't.

That's about to change.

Shadow Clocks with Don Kaufman
Wednesday, September 10 | 1 PM ET

After the Close 

Classic schizo market day. Tech soaring to records, Dow bleeding red, and everyone's holding their breath for inflation data. The smart money's making moves while retail sits confused.