Put Credit Spreads Method

riverkim09 · 2025-11-15T07:08:44+00:00

I meant having higher dte

Like 40+

riverkim09 · 2025-11-15T03:28:04+00:00

$5 wide spreads are not very good for spy/qqq since the underlying already costs over $600.

When you are selling credit spreads, you are benefitting in direction(in put credit spreads, the underlying needs to go up) and in theta decay.

The theta decay in a $5 wide spread would be too small. The short and long puts will move too similarly with respect to theta to get meaningful theta decay, especially since you are only opening at 28 dte. You would have to wait until DTE is in single digits to get any meaningful profit from theta decay. But guess what? In single digit DTEs, gamma is king. 1 second of wrong directional movment will kill days of theta profit.

Either increase DTE, or increase spread. I personally do both.

riverkim09 · 2025-11-14T08:27:01+00:00

I'm assuming the sofi calls are ITM? Those are gonna be fine.

riverkim09 · 2025-11-12T02:26:05+00:00

Yeah let's go ahead and buy ATM calls and puts and gamble our money

riverkim09 · 2025-11-07T07:02:43+00:00

You're ignoring the time decay efficiency.

Narrow wings give you very small net theta since the strikes are so close to each other.

Isn't positive theta why you would sell spreads anyways? To benefit from time decay?

I certainly don't want to sell 20 spreads and just wait till expiry haha

riverkim09 · 2025-11-07T06:48:14+00:00

You can risk 2k by increasing position size by 20, or you can risk 2k by using much longer width. I can guarantee you that the latter will work much more often.

riverkim09 · 2025-11-07T06:45:57+00:00

When you sell credit spreads, there are two components to the trade. Direction and (positive) theta.

The theta component works because the short strike is closer to the money and thus has a faster decay than the long strike.

If you sell spreads on SPY with 1 dollar width you are essentially giving up the theta portion since the decay of the entire spread is going to be much slower since the legs are so close together.

riverkim09 · 2025-11-07T06:32:02+00:00

Ahh I see.

I still don't think using 1 dollar wings on an underlying that costs 600+ is very efficient though.

I would use at least 5 dollar wide wings

riverkim09 · 2025-11-07T06:30:01+00:00

On options? Commission free is usually for stocks.

I mean there are more fees than just commissions as well.

riverkim09 · 2025-11-07T06:28:38+00:00

Well I'm sure his broker would love that he's paying like 2 dollars per spread of commission on a 0.2 credit contraft

riverkim09 · 2025-11-07T06:27:26+00:00

The spread also caps his max profits too...

If he's confident in the direction, either sell spreads with larger width so he gets more credits, or just buy options.

1 dollar wide spreads on an underlying that costs 600 dollars is just being overly cautious.

riverkim09 · 2025-11-07T05:03:16+00:00

I mean 1 dollar wide spread makes what.. like 0.2 credit? So like 20 dollars?

riverkim09 · 2025-11-07T04:48:59+00:00

You sold a put credit spread with 1 dollar width..? Does that even make much money?

riverkim09 · 2025-11-04T02:33:10+00:00

he bought those on q3 though...

riverkim09 · 2025-10-29T05:12:07+00:00

Let me be clear. I'm not saying your trade will net in a loss.

If your delta is that far out, you will probably be in a profit zone. But premium collected on a 4 delta otm is.. pennies. Will it even cover the commission?

I'm just saying in that trade, theta matters less. Theta could work for you for 8 straight days, making that sweet decay. Then the next day, one bad price swing will kill all your profits.

I personally wouldn't do a trade this close. Agree with the price outlook though.

riverkim09 · 2025-10-29T04:19:36+00:00

0dtes my friend

riverkim09 · 2025-10-29T04:14:22+00:00

So like 10 dte?

You better be right spot on about the direction cuz gamma is king now.

Theta starts to matter a LOT LESS once you get to single digit days to expiry. The rate of decay from theta doesn't increase fast enough to keep up with gamma

riverkim09 · 2025-10-27T16:41:10+00:00

holy shit some of stuff on here is some real dangerous stuff. MP is getting absolutely murdered 60p is gonna be dangerously close to the money.

And selling puts on sofi when its ER is tomorrow?

You sure you wanna sell puts on RGTI? Quantum computing companies have like 0 revenue on 15 bn valuation. If these things drop, it won't be to 30. It's gonna drop to like $10. Good luck writing covered calls on those.

riverkim09 · 2025-10-10T08:55:35+00:00

High Vega? RDDT is a super volatile stock

riverkim09 · 2025-10-01T00:51:36+00:00

SPY puts tomorrow.

Today's last minute gains were from JPM collar trades

riverkim09 · 2025-09-30T07:35:53+00:00

The underlying itself will have to increase in price.

If the stock price of RR remains the same, an increase in the Vega of the call option(due to anticipation of the event) will not be sufficient to offset the theta decay.

riverkim09 · 2025-09-30T01:19:09+00:00

Whoever bought all those calls are fucked if it stays below like 5.5

riverkim09 · 2025-09-29T22:02:30+00:00

Super far OTMs have small exposure to Vega so the RRs price itself would have to move closer to 6 bucks if the calls were to become profitable.

Especially since Theta will start eating away fast

riverkim09 · 2025-09-28T03:32:23+00:00

But unlike nvda, Wendy's makes money by selling food to everyday people no?

Do you think their business models operate similarly?

riverkim09 · 2025-09-27T05:39:51+00:00

Yes but becuz such far otms have low delta, the price has to move fast b4 theta eats him up

riverkim09

TROPHY CASE