If you were in the Trade to Close room today, you might have seen me filling in for her.
What did we talk about?
How small accounts can day trade without the pattern day trader rule.
And it all starts with options…
A call is a put and a put is a call. They are the same thing.
You’re saying “No, Mark, no, no, they’re not.”
They are. You just have to do some hoops to get there.
The Mathematical Foundation
There’s a formula called put-call parity – it holds the entire options universe together:
Call minus Put = Stock Price minus Strike Price plus Cost of Carry
Here’s the key insight: When you add stock to the equation, you completely change the math.
Your Trading Map
Write this down:
Difference in Strikes minus Call Spread = Put Spread
If you buy a 10-point call spread for $2, you’re simultaneously selling the equivalent put spread for $8. They’re mathematically identical positions.
The Process
Live Example:
The system creates a box spread that nets to zero risk without recognizing it as closing the same position.
Use XSP, Not SPY
XSP is cash settled. With SPY, you risk assignment if options expire exactly at the strike. With XSP, positions just disappear at expiration.
Complete Examples
Bull Zones:
Bear Zones:
Why This Works Forever
This isn’t a loophole – it’s fundamental options mathematics that’s existed since options were invented. The relationship between calls, puts, and stock is immutable.
Small accounts can now trade momentum and capture quick moves without the $25,000 PDT barrier.
Key Rule: All transactions are buys. Buy call spread to open, buy put spread to close. Buy put spread to open, buy call spread to close.
Practice this in your system before going live.
Speaking of timing – with earnings season starting this week, I’m opening my Delta Strike service free for three days so you can see how Big Money flow creates the opportunities that make these synthetic strategies work.
If you missed the first session, no worries, the next two sessions is where things really pick up.
Your Only Option,
Mark Sebastian
Subscribe now to keep reading and get access to the full archive.