Buying SPY Put Options as Lotto Tickets

I am buying deep out of the money S&P 500 ETF (SPY) puts in case the market falls soon.

Last Thursday, I started losing confidence in the stock market advance.  Despite the rebound on Friday, it seems the market is one TBD event away from a major decline or crash.  At this point, my inclination is to mostly hodl, and not to buy the dip.  

In addition, I'm betting on a SPY decline.  I am scaling into SPY puts expiration January 15, 2027 with strike prices of 100-130.  I'm paying $0.01 per share for a 100 share contract or $1 total,  the cost of a lotto ticket.  Of course, unless something catastrophic happens, SPY is not likely to fall to 100 since it closed at 746, this past Friday.  However, SPY doesn't need to drop to 100 for me to make money.  If SPY drops to 646 next week, I will make $5-10 because of how options are valued based on market volatility (risk) and SPY price.   

I know a $5-10 gain isn't much, but that's why I call it a lotto ticket. If I the option expires worthless, which is what happens with most lotto tickets, I can write off the loss on my taxes.  Woohoo!

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This is not financial nor investment advice. Please consult a professional advisor.

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