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Market MeasuresOptimal Timing with Credit Spreads | May 25, 2017
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    Market MeasuresOptimal Timing with Credit SpreadsMay 25, 2017

    We often use options to carry out a directional bias that we have in a certain market in lieu of taking a position in the underlying stock or futures product. This usually affords us a slightly better Probability of Profit than the 50/50 shot that goes along with a long or short stock position. Today, Tom and Tony take a look into what time frames might be most beneficial when taking these directional plays to the options market, with the primary strategy today being Credit Vertical Spreads.

    The Study

    The Results

    While we saw that the shortest-term option showed the greatest per day results, the average P/L on the whole was so small that the reward does not seem worth the potential risk. Tom concludes that our 45 DTE go-to is still the optimal. Check out the segment above for greater detail.

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