This is the kind of post that makes you laugh and then check if the person is actually right.
A trader on WallStreetBets is telling everyone to stop buying SPY options and use SPX options instead.
The argument is pretty simple.
SPX options are cash settled.
No assignment risk.
They can be traded overnight.
And they get better tax treatment because of the Section 1256 rule.
The trader even showed off a 0DTE trade.
They bought SPX $7,500 calls at $0.75 right before the close.
They claimed those contracts would settle around $3.85.
That is a huge gain on paper.
Of course, this is WallStreetBets.
The comments quickly turned into the usual mix of “this is genius” and “you are about to lose everything.”
The funny part is the original point got buried under the trolling.
A lot of smaller traders buy SPY options because they are familiar.
The ticker is everywhere.
But the structure of the contracts is different.
SPX is designed more for index trading.
SPY is an ETF.
That difference matters when you start playing short dated options.
The bigger question is whether people are actually learning the mechanics or just looking for the next lottery ticket.
Because knowing the difference between SPY and SPX might save someone money.
But buying 0DTE options 30 seconds before the close is still very much the WallStreetBets lifestyle.