Hey 5-Star Trader,
As a self-made retail trader, I know firsthand how difficult it can be to learn everything you need to know about options through the internet. With countless strategies swirling around, I knew I had to decide what kind of trader I wanted to be and form a plan of attack.
Through lots of trial and error, one thing that really helped me was differentiating between key options strategies and creating a pro and con list for each. This week, I want to show you my table for “Selling In The Money Put Credit Spreads.”
Weighing Your Options…
The Takeaway:
As you can see from the image above, there are quite a few pros and cons for this strategy. So what next? After I have made my list, I then choose what market scenarios would work best for this strategy.
For selling in the money put credit spreads, I find the best time to do this is when one or more of the following instances are true:
- You want defined risk
- You believe an equity will stay above a specific price
- You want to sell premium, instead of buying it
- You want a strategy to even out the positive deltas you’ve purchased
- You want a relatively stress free strategy
Weighing your options is a huge part of becoming a successful trader. Even if my strategies don’t resonate with you, I would highly recommend creating a pro and con table for each method you are struggling with. The results might surprise you!
-Danielle =)
You can find more tips and tricks just like this in my Options 101 course.
