SPY Buy the Dip Calculator: The Dry Powder Trade

Scale a separate $200,000 into SPY, with the largest buys at a −25% to −30% drop.

IV Rank (1y) 34 — based on VIXVIX 19.45 (S&P 500 implied vol, a proxy for SPY). 1y low 13.47, high 31.05. IV percentile 78%. As of Oct 23, 2026. What is IV Rank?

Separate cash account · SPY

The Dry Powder Trade

Market closedYour fills save in this browser

Step 1 · Your dry powder

Cash set aside for buying dips

Enter the cash you’ve set aside only for this plan, money you won’t need for bills or other trades. The ladder splits it across 10 buy levels.

Example: $200,000 — enter yours.

SPY

$759.97

-$3.99 (-0.52%)

Last close · Oct 23, 4:00 PM ET

VIX

19.45

+0.42 (2.21%)

Reference only. Not a buy signal.

SPY now $759.97, 2.77% below its 52-week high.

Example: if SPY fell to $742.54 (−5%)

Example order

Buy 13 shares

$742.54 is through −5% and those rungs are still open. Place the limit orders. Do not add again if price only retests the same level.

−5% · 13 shares · limit $742.54 · $10,000
Combined order $10,000. Mark each rung filled after the trade prints.

This is an example at the first rung, not today’s price. Tap “Use today’s price” or type any price below.

Check a price

The ladder

$0 deployed · $200,000 left

High−25%−50%

−5% Example
13 shares · limit $742.54 · $10,000
−10% Waiting
21 shares · limit $703.46 · $15,000
−15% Waiting
30 shares · limit $664.38 · $20,000
−20% Waiting
39 shares · limit $625.30 · $25,000
−25% Waiting
51 shares · limit $586.22 · $30,000
−30% Waiting
54 shares · limit $547.13 · $30,000
−35% Waiting
39 shares · limit $508.05 · $20,000
−40% Waiting
42 shares · limit $468.97 · $20,000
−45% Waiting
34 shares · limit $429.89 · $15,000
−50% Waiting
38 shares · limit $390.81 · $15,000

Plan

The Dry Powder Trade is to take advantage of the pullbacks. We always have at least 40% of our portfolio in cash (dry powder) and we scale in as SPY falls in price. It’s buying the dip plus powerful income generation.

After we load our shares and SPY stabilizes we will sell covered calls (1 for every 100 shares we own), collecting premium on the way up. We can also buy 1 leap call for every 100 shares of SPY we own as soon as the price is trading above the 21 SMA. Once we establish a leap call position we can turn that position into a PMCC by selling a covered call on each leap we own.

Most bears stop around −30%, not −50%. Buys build into that level, $30,000 at −25% and $30,000 at −30%. If it goes no further, about two-thirds of the cash is already in. The rest stays back for a drop past −35%. One fill per level. Do not buy between levels. VIX is context, not a trigger.

Anchor high

Notes

Separate cash account. SPY only. Typically 40% of your account in dry powder. VIX is on the tape for context and is not a trigger.
Anchor is the high you scale from, $781.62 until a new high replaces it. One fill per level. Do not buy between levels. A gap through several rungs is one combined order.
The probable stop is −30%. The largest buys are $30,000 at −25% and $30,000 at −30%. About $130,000 is in if it stops there. $70,000 stays back through −50%. Nothing is reserved past −50%.
Postwar bears: median depth about −31%. A −50% price drop has happened once since 1945. From the low, a typical bear is back at the old high in about 15 months. Past −40%, that wait has been 4 to 6 years. The shares break even before the index does.

Running note

How the SPY ladder works

Start with Step 1: enter your dry powder, the cash you’ve set aside only for this plan. The calculator starts with an example $200,000; type your own amount and every level, dollar amount and share count updates at once. The app opens on an example price at the first rung so you can see how an order looks. Tap Use today’s price and it compares the live SPY price with your anchor high, which starts at the 52-week high. When the price reaches a rung’s limit, it tells you to buy that rung’s shares; when it hasn’t, it says Do not buy and shows how far away the next rung is. Mark each rung filled after the trade prints, and that rung won’t come up again. The quote refreshes every minute in market hours, and you can type any price into Check a price to preview the plan there.

Default SPY ladder ($200,000, anchor $781.62 = 52-week high)

Rung	Drop from high	Limit price	Share of cash	Dollars	Shares
1	−5%	$742.54	5%	$10,000	13
2	−10%	$703.46	7.5%	$15,000	21
3	−15%	$664.38	10%	$20,000	30
4	−20%	$625.30	12.5%	$25,000	39
5	−25%	$586.22	15%	$30,000	51
6	−30%	$547.13	15%	$30,000	54
7	−35%	$508.05	10%	$20,000	39
8	−40%	$468.97	10%	$20,000	42
9	−45%	$429.89	7.5%	$15,000	34
10	−50%	$390.81	7.5%	$15,000	38

How the levels were set

Each ladder has ten buy levels, evenly spaced from the high, using the original app’s sizes: 5%, 7.5%, 10%, 12.5%, 15%, 15%, 10%, 10%, 7.5% and 7.5% of the cash. The heaviest two buys are rungs 5 and 6. We set the bottom rung at the second-deepest bear market in the ticker’s history, rounded to the nearest 5%. That is the level only one bear went past. The other rungs are equal steps down to it.

A bear market here means a fall of 20% or more from a record close, measured to the lowest close before a new record. That is the same frame the ladder uses: you scale in from a high and reset after a new high.

For SPY we use the S&P 500 index since 1945, which gives a much longer record than SPY itself (SPY began in 1993). There were 12 bear markets. The median depth was −31.6% and the deepest was −56.8% (2007–09). The second-deepest was −49.1% (2000–02), which rounds to −50%. So the steps are 5%. That reproduces the original app’s ladder exactly: the heaviest buys at −25% and −30% sit just above the median bear, and only 2007–09 went past −50%. 6 of the 12 bears stopped at or before −30%. The median time from the low back to the old high was 15 months, in line with the original app’s “about 15 months”.

S&P 500 index (^GSPC), postwar, 1945-2026: every fall of 20% or more from a record close
Bear	High	Low	Depth	Low to new high
1946–49	May 29, 1946	Jun 13, 1949	−29.6%	11.9 mo
1956–57	Aug 2, 1956	Oct 22, 1957	−21.5%	11.1 mo
1961–62	Dec 12, 1961	Jun 26, 1962	−28.0%	14.3 mo
1966	Feb 9, 1966	Oct 7, 1966	−22.2%	6.9 mo
1968–70	Nov 29, 1968	May 26, 1970	−36.1%	21.4 mo
1973–74	Jan 11, 1973	Oct 3, 1974	−48.2%	69.4 mo
1980–82	Nov 28, 1980	Aug 12, 1982	−27.1%	2.7 mo
1987	Aug 25, 1987	Dec 4, 1987	−33.5%	19.7 mo
2000–02	Mar 24, 2000	Oct 9, 2002	−49.1%	55.7 mo
2007–09	Oct 9, 2007	Mar 9, 2009	−56.8%	48.6 mo
2020	Feb 19, 2020	Mar 23, 2020	−33.9%	4.9 mo
2022	Jan 3, 2022	Oct 12, 2022	−25.4%	15.2 mo

Data: S&P 500 index (^GSPC), postwar, 1945-2026, from Yahoo Finance daily closing prices. Analysis run Oct 25, 2026. Depths use closing prices, so intraday lows were a bit deeper.

Worked example

Start with the defaults: $200,000 of separate cash and an anchor high of $781.62, SPY’s 52-week high as of Oct 23, 2026 (the app keeps the anchor on the live 52-week high unless you set your own). The calculator opens on an example at the first rung: if SPY fell to $742.54 (−5%), the order is 13 shares, $10,000 or 5% of the cash. Tap Use today’s price to run it at the live quote instead.

Say SPY falls −31.6% from the high, the median depth in the history below, to about $534.63. Rungs −5% through −30% have filled: 6 orders, 208 shares, about $130,000 deployed (65% of the cash). The remaining $70,000 waits for −35% and lower.

If it keeps falling to −50% ($390.81), all ten rungs are filled and the full $200,000 is in. Nothing is reserved past that level. If price gaps through several rungs at once, they go in as one combined order.

After you buy: the income side

Risks and limits

History sets the levels, but the next bear can be shallower (the cash never gets used) or deeper (the ladder runs out). A bear deeper than 50% has happened once since 1945. This ladder is fully spent at −50% and holds nothing back for a deeper drop.
Buying the dip means buying while the price is still falling. Each fill can show a loss for months.
Limit orders can miss if price only touches a level, or fill on a fast drop that keeps going.
Cash for this plan should be money you will not need during a long bear market.
The covered calls and LEAPS in the plan add option risk. See the OCC’s “Characteristics and Risks of Standardized Options” before trading options.

SPY buy the dip FAQ

What is the dry powder trade for SPY?

It keeps a separate pile of cash (dry powder) and buys SPY in ten steps as it falls from its high: a small buy at −5%, the largest buys at −25% and −30%, and the last at −50%. One fill per level, and nothing is bought between levels.

How much SPY does the calculator buy at each level?

With $200,000: $10,000 at −5%, $15,000 at −10%, $20,000 at −15%, $25,000 at −20%, $30,000 at −25%, $30,000 at −30%, $20,000 at −35%, $20,000 at −40%, $15,000 at −45%, $15,000 at −50%. Shares = dollars ÷ limit price, rounded down.

Why are the biggest SPY buys at −25% and −30%?

Postwar S&P 500 bear markets had a median depth of about −31.6%, and half of them (6 of 12) stopped at or before −30%. Putting the largest buys there means about $130,000 is in if the drop stops at a typical depth.

What if SPY falls more than 50%?

The ladder is fully spent at −50% and nothing is reserved past it. Since 1945 that has happened once, in 2007–09 (−56.8%).

What is the anchor high, and when do I reset?

The anchor is the high you measure every drop from. Here it starts at the 52-week high and follows the live quote, or you can set your own. Keep it until a new high replaces it. After a new high, and only once the account is funded again, reset the filled rungs and start a new campaign from the new high.

Is VIX a buy signal in this plan?

No. VIX is shown for context only. Buys happen only when the price reaches a rung.

What is dry powder, and what amount should I enter?

Dry powder is cash kept ready to invest when prices fall. In this calculator it is the cash you have set aside only for buying SPY dips: money you won’t need for bills or other trades. Enter that amount in Step 1 (the page starts with an example of $200,000); the ladder splits it across 10 buy levels, and the number is saved only in your browser.

What is IV Rank, and why is it based on VIX for SPY?

IV Rank (1y) shows where implied volatility sits in its past-year range: (today − 1-year low) ÷ (1-year high − 1-year low) × 100. 0 means at the year’s low, 100 at the year’s high. IV percentile is the share of the past year’s daily closes that were below today. We use VIX: Cboe’s 30-day implied volatility of S&P 500 options. SPY tracks the S&P 500, so VIX is the standard stand-in for SPY’s own implied volatility. Free daily history of SPY’s own option volatility isn’t available, so we started logging it each day and will switch once a year of it exists. On the last build it was 34, with VIX at 19.45 against a 1-year range of 13.47 to 31.05.

Why does IV Rank matter for selling puts versus buying the dip in SPY?

Option prices rise with implied volatility. When IV Rank is high, puts pay more premium, and that is also usually when prices have already fallen and fear is up. When it is low, premiums are thin and markets are often calm near highs. The ladder on this page buys shares on price alone, so IV Rank is context, not a trigger. It describes option prices, not where SPY goes next.

Where are my fills saved?

In your browser only (local storage on this device). Nothing is sent to us. Clearing your browser data clears your fills and notes.

Education only, not financial advice. This site is not affiliated with any fund issuer. Coins-per-share figures come from issuer websites and can be delayed or wrong, so check the issuer’s page before you rely on a number. Crypto is very volatile and you can lose money.