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The Slingshot Trade: a ratio risk reversal for a stock you want to own. Sell a one- to two-year put at a strike you would be glad to own, spend that credit on the at-the-money call with the same expiration, and let this page tell you when the pullback is finished and when to take the 50%.
The Slingshot Trade · daily call
Daily call · Oct 23 close
Falling-knife risk
This is not a healthy pullback. Price is under a falling 21-day with RSI still dropping, or the lows keep getting taken out. No new short put until price is back over a rising 21-day and RSI stops making lower lows.
This session
Today so far $765.44 is +0.7% versus the Oct 23 close, 2.1% under the Oct 6 high, and -0.5 ATR from the 21-day. Price is still near the high.
The trade
Do not sell the put. A falling tape is not your ownership price.
$765.44
+0.7% · today so far
Oct 23 close
$759.97
-0.5%
Fearful — selling still in control
Scores describe the tape. They are not the odds a put expires worthless.
4–8% under the Oct 6 high of $781.62. A touch is not a signal — price has to stabilize and RSI has to turn.
Daily bars from Oct 28, 2024. 21% above the $629.28 low, 3% under the $781.62 high (Oct 6). 200-day is $727.01. Defined risk, not hero size.
— Close — 21-day — 50-day
RSI 14
VIX at 18.3 says size down, don't stand down entirely. QQQ is under its 21-day. SPY has lost its 21-day — treat SPY dips as guilty until the index steadies.
Completed daily bars only. Premarket and the open are a lean, not a new signal. This will not name the minute a pullback ends.
Extended — take the 50% — when price is still near the 15-day high and RSI is about 67 or higher, or price is roughly 1.5 ATR above the 21-day, or a fast 5-day rip hasn't been given back.
Reload when price is about 4–12% off that high, RSI has turned up from a cooler reading, the close is higher, and price is still above a rising 21-day or 50-day. The market has to cooperate: VIX under ~24, SPY not breaking its 21-day.
Stand aside when the 21-day is falling, price is under it, and RSI is still dropping — or the index tape is stressed. That is the falling knife.
RSI is Wilder 14. The 21-day is an EMA, the 50-day a simple average, in the same family as a Thinkorswim daily chart. Confirm the print there before you send the order. If there is no 200-day yet, the 50-day is the long line.
The order, only on a reload: sell the 1–2 year put at your ownership strike, then buy the at-the-money call in that same expiration. Spend the put credit. Don't add cash. That call is the free roll. If you want more income later, sell a shorter-dated call against it — one per leap call. That is the poor man's covered call.
Not a recommendation to sell or buy options. You still pick the strike, the size, and whether the credit is worth it. Updated Oct 26, 12:22 PM ET.
The full write-up, with a SPY example priced from real quotes and its POP, POT and P50: The Slingshot Trade: how I use a ratio risk reversal to sell puts and buy calls.
A risk reversal is a short put paired with a long call on the same stock and expiration. The put’s premium pays for the call. The Slingshot Trade sets the two sides by dollars, not by contract count, which makes it a ratio risk reversal: an at-the-money call usually costs more than an out-of-the-money put, so you either sell more puts than you buy calls or buy fewer calls than you sold puts. You add no cash for the call.
The two legs do different jobs. The short put is a paid limit order at a price you would be happy to own the stock. The long call is the slingshot: if the stock runs, it carries the upside; if it doesn’t, what expires is the put’s credit, not new money. The catch is the put: if the stock falls through the strike you may be assigned the shares, and the calls can expire worthless at the same time. That is why the page is so strict about when to sell the put.
The stock is stretched: RSI 67 or more, or 1.5 ATR or more above the 21-day average, within about 3.5% of its recent high (or up 6% in five sessions). If you sold a put into the last dip, look at buying it back near half the credit. Don’t open a new put up here.
Within 3% of the high with RSI firm but not extreme. No new setup; the next sale is the next 4–8% pullback.
Something is giving back, but RSI has not turned up from a cooler reading with a higher close, or structure or the tape disagrees. Pick the strike and expiration now; sell only after the turn.
4–12% under the high, RSI turned up with a higher close, the close held the 21-day (or a rising 50-day), the day’s low held the prior five sessions, and VIX under about 24. This is the only call that says sell the put and fund the call.
Under a falling 21-day with RSI still dropping, under a falling 50-day with RSI under 50, or a stressed index tape. A falling tape is not your ownership price.
Daily bars from Yahoo Finance (two years, delayed) for the ticker plus SPY, QQQ and VIX. RSI 14 and ATR 14 use Wilder smoothing; the 8- and 21-day are exponential averages seeded with a simple average; the 50- and 200-day are simple averages. The swing high is the highest high of the last 15 sessions and the pocket is 4–12% under it. Only completed sessions feed the call; during market hours the latest print is shown under “This session”. The Trend, Entry and Market scores summarize the same checks on a 0–100 scale; they describe the tape, not the odds a put expires worthless. This build used bars through Oct 23, 2026.
The page names no strikes, so it shows no probability numbers of its own. When you have a specific put in mind, check its probability of profit, probability of touch and chance of a 50% profit with POP vs POT vs P50 explained.
The Slingshot Trade is a ratio risk reversal on a stock you want to own: sell a put one to two years out at a strike you would be glad to own, then spend that credit on at-the-money calls with the same expiration. This page times it: for any ticker it reads the daily chart and the market tape and gives one call — take the 50%, let the put work, stalk it, pullback looks done, or stand aside.
A risk reversal pairs a short put with a long call on the same stock and expiration, so the put’s premium pays for the call. In a ratio risk reversal the two sides are matched by dollars, not by contract count: an at-the-money call usually costs more than an out-of-the-money put, so you sell more puts than you buy calls, or buy fewer calls than puts sold. You add no cash for the call; you take on the obligation to buy shares at the put strike.
Only on the call “Pullback looks done”: price is 4–12% under its recent 15-session high, RSI 14 has turned up by at least half a point from 55 or below with a higher close, the close held the 21-day average (or a rising 50-day), the day’s low did not undercut the prior five sessions, and VIX is under about 24. A red open on its own is not that signal.
It is the exit for the short put. When the stock is stretched (RSI 67 or more, or 1.5 ATR or more above the 21-day, within 3.5% of the high, or up 6% in five sessions near the high), the page says to look at buying the put back near half the credit you received and to leave the long call alone. It is also a bad time to open a new put.
The zone 4–8% under the highest high of the last 15 sessions. For SPY on the last build that was $750.36 to $719.09. Being in the pocket is not enough on its own: RSI has to turn up and the close has to hold structure.
When price is under a falling 21-day with RSI still dropping, or under a falling 50-day with RSI under 50, the dip is treated as a falling knife: the put strike you sell may not be your ownership price for long. It also stands aside when the index tape is stressed (VIX 30 or more, or VIX 24 or more with SPY under its 21-day).
Because the point of the trade is that the long call costs you no new cash. If the call costs more than the put brought in, buy fewer calls or sell more puts, and size the puts so you could buy every share they obligate you to.
A poor man’s covered call: once you hold the long call, you can sell one shorter-dated call above the market against each long call for income. This page times the put, not that short call; a stretched tape is a sensible time to sell it.
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. For SPY it uses VIX, for QQQ VXN and for IBIT bitcoin’s DVOL, because a year of daily history exists for those. For any other ticker the page shows its current 30-day implied volatility from Cboe instead, since a rank needs a year of daily readings. On the last build SPY’s IV Rank was 34 (VIX 19.45, 1-year range 13.47 to 31.05). A high IV Rank means the put you sell pays more, and the call you buy costs more too.
This page makes no performance claims and shows no backtest. It applies a fixed set of timing rules to public data. A ratio risk reversal can lose more than a plain short put if the stock falls: the put can be assigned at the strike while the calls expire worthless.
Daily bars for the ticker, SPY, QQQ and VIX from Yahoo Finance (delayed), refreshed in your browser on load and every minute while the page is open. Only completed daily bars feed the call; during the session the latest print is shown separately as “today so far”. This build used bars through Oct 23, 2026.
No. It is education. You still pick the stock, the strike, the size and whether the credit is worth it. Options involve risk and are not suitable for every investor.
Related: POP vs POT vs P50 explainedOptions trade ideasSPX DeskThe Buy the Dip AppArticle: the Slingshot Trade, a ratio risk reversalWhy I trade SPX, SPY, QQQ and IBIT optionsAll tools