Assume I have $100k invested in plain equities. I want to leverage up to 1.3 to invest in US large cap. I setup an ATM synthetic long 1 year out in SPLG (a lower cost version of SPY):
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Assume I have $100k invested in plain equities. I want to leverage up to 1.3 to invest in US large cap. I setup an ATM synthetic long 1 year out in SPLG:
The actual cost of the options might be $500 in cash. That means $500 is giving a notional exposure of $28400 in the S&P 500. With portfolio margin, my buying power (coming from the value of current equities) might be reduced by $3k to hold this position, however there is no cost for that.
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The actual cost of the position might be $500 in cash. That means $500 is giving a notional exposure of $28400 in the S&P 500. With portfolio margin, my buying power might be reduced by $3k to hold this position.
This involves buying 2 .75 delta calls, and selling a .50 delta call. These deltas can be adjusted a bit, but the general idea is it should total about 1 delta. It is similar to a synthetic long stock.
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Overview videos:
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- [How I Trade Zebras in a 5K-10K Account](https://youtu.be/KVVxPwVdmOo?si=6_D68JKfgJq1bGzU)
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- [What Is The ZEBRA Strategy?](https://youtu.be/cWHNlSmSAJ4?si=jvZ1A3UWTMvPqlZm)
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###### Example
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Assume I have $100k invested in plain equities. I want to leverage up to 1.75 to invest in US large cap. I setup a ZEBRA 1 year out in SPY:
The actual cost of the position might be $14k. That means $14000 is giving a notional exposure of $50750 in the S&P 500. With portfolio margin, my buying power might be reduced by $6500 to hold this position.