Cycle Trading

[Duma]

Wow, I haven't done Bull Credit Put Spreads for a long time so you caused me to have to put my thinking hat on again and refresh my mind.

I just ran the numbers for ROKU for Mar 26 spreads. Here is what I got. I don't know how you create your spreads, so I used how I do it. ROKU was trading about 354.

 
 Bull Debit Call Spread            Bull Credit Put Spread 
 +18.05 sell 340 call              +3.73 sell 340 put 
 -44.17 buy  310 call              - .55 buy  310 put 
  
  26.13 cost and max loss           3.18 max profit 
   3.87 max profit                 26.82 max loss

I hope I got this right. As I remember I did put spreads a few times because I did seem to get a littler better profit. In this case I didn't. I don't like the reverse thinking required for puts spreads, so I just stayed with calls.

I just looked up how Interactive Brokers calculates margins and for spreads it is based on the spread. So for IB, it doesn't matter which way the the spread is done. The best way to save on margin is to limit the size of the spread, which will also limit the profit cabability. The less TV (time value) in the option bought, the higher the profit.