Hello Share Navigator members,
As we reach mid-April, our portfolio is off to a stellar start, up 9.2% year-to-date. With the S&P 500 currently pushing against major resistance, we are evaluating a tactical "Bear Put Spread" to capitalize on a potential pullback and protect those gains.
Important Note: This is a Speculative Bet
This trade is a low-probability, high-reward play. Unlike our usual short put strategies where we have a ~90% chance of winning, the probability of profit here is only 16%.
The Mindset:
Don't expect to win on this trade. We are treating this as a calculated, low-risk speculative bet. If it doesn't work, the loss is minimal; if it does, we have a massive multiplier on our hands.
The Strategy: Bear Put Spread (April 2026 Expiry)
By selling the 6700 strike underneath our 6800 long put, we significantly reduce our entry cost.
For IG Platform Users:
Trade: 6800/6700 Bear Put Spread
Net Cost: Circa $15 per point
Maximum Potential Gain: $85 per point (Tax-Free)
Course Tutorial: The Smarter Bear Strategy on IG
For IBKR Users (Futures):
Trade: MES April 6800/6700 Bear Put Spread
Net Cost: Circa $65 per contract
Maximum Potential Gain: Circa $435
Course Tutorial: The Bear Put Spread on IBKR
Trade Execution & Management
Please note: We have not placed this trade yet. We are lining this up and will make a final decision based on today's market action.
The Trigger: We expect a test of the 7000 level and potentially a slight break above it. If we see that extension followed by signs of exhaustion, we will consider putting the trade on.
The Alternative: If the market fails to test 7000 and instead rejects early and starts falling, we will abandon this bearish spread and revert to our standard Put Selling Strategy.
Take Profit: If we do enter and the trade reaches 50% of our maximum potential profit, we will close it out immediately and bank the gains.
The "Out" (If Resistance Breaks): If the S&P 500 breaks through resistance to hit sustained new highs, we will close the Long 6800 Put to salvage value and let the Short 6700 Put ride to expiration to offset costs.
Position Sizing
I am looking at risking only 1% of our YTD portfolio gains. We are effectively using a small portion of our "house money" to play a potential reversal.
€10k Account: Bet size of 6 units (IG) or 1 contract (IBKR)
€20k Account: Bet size of 12 units (IG) or 2-3 contracts (IBKR)
Extrapolate for your account.
Stay disciplined,
Share Navigator Team