Will the S&P 500 be higher on June 1, 2022 than today?

#	Name	Total profit
1		Ṁ73
2		Ṁ51
3		Ṁ14
4		Ṁ12
5		Ṁ9

For reference, "today" means May 26 = 4,057.84. My answer to markets like this is always to look at the options: https://finance.yahoo.com/quote/SPY/options?p=SPY&date=1654041600 (SPY is 1/10 the value of the S&P 500) If you hypothetically bought a call option for June 1 at $405 and sold a call option at $406, you'd get a net payout of $1 if the price is >$406, a net payout of $0 if the price is <$405, and the payout is linear in between. So the price difference between those call options divided by $1 is roughly the probability that the price ends up above $406. And importantly, if you have a strong belief about the probability that's sufficiently different from the options market, you can buy relevant options to profit off of it. Yesterday night they unsurprisingly implied roughly a 50% chance that it's higher (plus or minus about 5% because bid-ask spreads limit how much precision we can expect). Right now, with the S&P 500 at 4126, the options imply roughly a 75% chance that it closes 6/1 higher than 4057. I'm kind of surprised it's that high.

🏅 Top traders

Related questions

Related questions