Manual
Credit Spread
A directional defined-risk fade when a key positive-gamma level is expected to hold.
The “Simple Fade” Play - Bet that a key level holds in a Positive Gamma environment.
Overview
| Attribute | Value |
|---|---|
| Environment | Positive Gamma (Drift) |
| Market Dynamic | Slow Grind Directional |
| Volatility | High VIX (>15) |
| Primary Goal | Fade the Move - Bet that resistance/support holds |
| Profit Target | 50% of Credit |
| Max Loss | Width of Spread minus Credit |
Structure
Bearish (Call Credit Spread)
- Sell OTM Call at the Call Wall
- Buy Further OTM Call (5-10 points higher)
Bullish (Put Credit Spread)
- Sell OTM Put at the Put Wall
- Buy Further OTM Put (5-10 points lower)
Entry Criteria
- Positive Gamma environment confirmed
- Clear directional bias (fading a move)
- Sell strike at a key level (Call Wall or Put Wall)
- Confident the level will hold
Exit Rules
Profit Target
- Close at 50% of credit received
Stop Loss
- 2x to 3x Credit Received
Management
This is a simple, defined-risk trade. No adjustments.