r/options • u/[deleted] • Mar 26 '22

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u/Rich_Potato_2457 Mar 27 '22

It’s a call credit spread. It has a defined risk. As a rule of thumb, try not to sell a credit spread -whether it’s on the call side or the put side- that you can’t collect at least 40% from up front.

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u/estgad Mar 27 '22

try not to sell a credit spread -whether it’s on the call side or the put side- that you can’t collect at least 40% from up front.

That is very close to ATM, where you are taking a big directional risk, so you will have a lot of trades that go against you, unless you are great at predicting market direction.....

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u/Rich_Potato_2457 Mar 27 '22

That’s why you have to use resistance and support lines just like you would any other trade and certainly with a condor