Re: [ConservativeOptionStrategies] Credit Spreads

 

In interpret Bull Put Spreads to be Credit Spreads.  I buy the further OTM Put and sell a closer OTM or ITM Put for a net credit. 

 

I do this quite a bit and track them religiously.

 

I have learned to do them in an account where I have significant margin capability so that I can roll them if they go bad.  I will roll the short position for another credit and then sell the long put - which has appreciated for more cash.  If I think theresulting NP exposure is too much I will enter another long OTM put and restablish the spread.

 

Bob

On Fri, Feb 26, 2010 at 8:50 PM, optionsmike <michael@safe-options-trading-income.com> wrote:

 

Hello to all,
Does anyone in the Group do credit spreads? If so, how do you limit your risk and close your trade? I like writing them and generally close them out early if I can get halfway back to zero from where I established the position.

Michael
www.safe-options-trading-income.com

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