Comments on: Vertical Credit Spread: A beautiful strategy for the income traders http://www.optionpundit.net/credit-spreads/what-is-credit-spread Powerful option trading strategies for consistent income. Credit spread, Iron Condor, Calendar spread, Double Diagonal, Income Spread. Wed, 07 Jan 2009 18:25:19 +0000 http://wordpress.org/?v=2.5.1 By: Coolio http://www.optionpundit.net/credit-spreads/what-is-credit-spread#comment-19777 Coolio Thu, 10 Apr 2008 13:52:10 +0000 http://www.optionpundit.net/credit-spreads/what-is-credit-spread#comment-19777 My strategy: write these on the SPY, DIA, IWM. Write them way out of the money for $.30 - $.50 credit 4-6 weeks from expiration. Then let time decay (theta) do all the work. Buy back the short put when it gets to $.05 or below (no fee at my broker) Also, sell the put verticals on down days especially when the $VIX is high to maximize the credit and area behind lines of support. Sell into the panic! Depending on commish structure, this may or may not work, my broker has ultra low commissions so this works for me, a small timer. I call it "selling junk." My strategy: write these on the SPY, DIA, IWM. Write them way out of the money for $.30 - $.50 credit 4-6 weeks from expiration. Then let time decay (theta) do all the work.

Buy back the short put when it gets to $.05 or below (no fee at my broker)

Also, sell the put verticals on down days especially when the $VIX is high to maximize the credit and area behind lines of support. Sell into the panic!

Depending on commish structure, this may or may not work, my broker has ultra low commissions so this works for me, a small timer.

I call it “selling junk.”

]]> By: OptionPundit http://www.optionpundit.net/credit-spreads/what-is-credit-spread#comment-11726 OptionPundit Mon, 10 Dec 2007 13:26:00 +0000 http://www.optionpundit.net/credit-spreads/what-is-credit-spread#comment-11726 Yes I do it many times tritrader. Yes I do it many times tritrader.

]]> By: tritrader http://www.optionpundit.net/credit-spreads/what-is-credit-spread#comment-11278 tritrader Thu, 06 Dec 2007 07:34:55 +0000 http://www.optionpundit.net/credit-spreads/what-is-credit-spread#comment-11278 Do you find yourself unwinding vertical credit spreads early to take profit off of the table? Do you find yourself unwinding vertical credit spreads early to take profit off of the table?

]]> By: Clarence http://www.optionpundit.net/credit-spreads/what-is-credit-spread#comment-7423 Clarence Sat, 27 Oct 2007 18:03:06 +0000 http://www.optionpundit.net/credit-spreads/what-is-credit-spread#comment-7423 In a Bull-Put strategy, can you explain what happens when, before option expiration, the price of the underlying stock lands in between the Sell and Buy strike prices? Will I be forced to close the Sell position? If so, will the broker also automatically close the Buy position to limit the loss since both positions were entered as a single spread? In a Bull-Put strategy, can you explain what happens when, before option expiration, the price of the
underlying stock lands in between the Sell and Buy strike prices? Will I be forced to close the Sell position?
If so, will the broker also automatically close the Buy position to limit the loss since both positions were
entered as a single spread?

]]> By: OptionPundit http://www.optionpundit.net/credit-spreads/what-is-credit-spread#comment-1064 OptionPundit Sun, 01 Apr 2007 08:09:25 +0000 http://www.optionpundit.net/credit-spreads/what-is-credit-spread#comment-1064 Dear Rapheal, Thanks for your kind words, comments and questions. For finding trades, I firstly decide the strategy I want to invest in, then I analyze which underlying will suit the most, define exit and entry criteria and a risk management plan. All these are part of a trading plan (for that strategy) and then I enter into a trade. I do trade based on events as well i.e. news, earnings, dividends etc but those are not my main style of trading. Most of my capital is invested in income trades. Regarding your question on Iron Condor Part-2 and 3 etc., I have not written those yet. Market was full of opportunities and I therefore prioritized making money vs. writing articles. Articles can afford being late but opportunities can’t. I plan to write my thought on IC in due course of time so pls stay tuned. Profitable trading Dear Rapheal,

Thanks for your kind words, comments and questions. For finding trades, I firstly decide the strategy I want to invest in, then I analyze which underlying will suit the most, define exit and entry criteria and a risk management plan. All these are part of a trading plan (for that strategy) and then I enter into a trade. I do trade based on events as well i.e. news, earnings, dividends etc but those are not my main style of trading. Most of my capital is invested in income trades.

Regarding your question on Iron Condor Part-2 and 3 etc., I have not written those yet. Market was full of opportunities and I therefore prioritized making money vs. writing articles. Articles can afford being late but opportunities can’t. I plan to write my thought on IC in due course of time so pls stay tuned.

Profitable trading

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