✅ Strategy: Directional Credit Spread with Trend Confirmation
Designed for swing traders and high-probability setups, this strategy sells premium and uses technical trend confirmation to stay on the right side of momentum.
🔍 Ideal Conditions:
- Use on QQQ (tech-heavy) or SPY (broader S&P 500)
- Works best when price is trending clearly
- Ideal timeframes: 1H, 4H, Daily
- Use during earnings season or strong macro trend for more premium
📈 Strategy Type: Bull Put Spread (Uptrend) or Bear Call Spread (Downtrend)
🔹 Bull Put Spread (for uptrend)
| Leg | Action | Strike | Expiry (30–45 DTE) |
|---|---|---|---|
| Sell Put | Short | ATM or slightly OTM (ex: 1–2 strikes below current) | |
| Buy Put | Long | 1–2 strikes further OTM |
Example (QQQ at $420):
- Sell $415 Put
- Buy $410 Put
- Net Credit: ~$1.50
- Max Risk: $3.50 (spread – credit)
- Break-even: $413.50
Probability of Profit (POP): 65–75%
Exit: When 50–70% of max profit is reached or price breaks trend.
🔹 Bear Call Spread (for downtrend)
| Leg | Action | Strike | Expiry (30–45 DTE) |
|---|---|---|---|
| Sell Call | Short | Slightly OTM (ex: 1–2 strikes above current) | |
| Buy Call | Long | Further OTM |
Example (SPY at $510):
- Sell $515 Call
- Buy $520 Call
- Net Credit: ~$1.40
- Max Risk: $3.60
- Break-even: $516.40
📊 Confirmation Tools:
Use these for high-confidence setups:
| Tool | Signal |
|---|---|
| 8/21 EMA crossover | Confirms short-term trend |
| RSI (14) | Over 55 = bull bias / Under 45 = bear bias |
| MACD histogram > 0 | Momentum strength |
| Volume Surge | Institutional confirmation |
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📅 Timing:
- Enter on Monday or Wednesday to give the trade a full week.
- Use 30–45 DTE to avoid gamma risk.
- Exit early at 50–70% profit to avoid reversal.
🛡️ Risk Management:
- Risk no more than 1–2% of account per spread
- Hedge with SPX or VIX options if market gets volatile
- Use stop loss at 50–60% of max loss if the trade goes against you
🔔 Bonus: Add Alerts to Help You
In TradingView:
- Create alert when RSI crosses over 55 (bull) or under 45 (bear)
- Create alert when 8 EMA crosses 21 EMA
- Combine these into your spread triggers
✅ Summary Checklist for QQQ/SPY Options Trade:
- Identify clear trend (RSI + EMA confirmation)
- Choose 30–45 DTE options
- Sell credit spread in direction of trend
- Target 50–70% profit
- Exit early or on trend break
- Manage risk and journal your trade
***Remember, non of this is never financial advice, but is for pure entertainment and educational purposes only***
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