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Thursday, October 16th
“In three words I can sum up everything I’ve learned about life: it goes on.”
– Robert Frost
Major Market Events
- Fed flies blind on data — Shutdown delays key reports, complicating timing of the next rate move
- AI chip cheer lifts stocks — TSMC momentum boosts Nvidia/Broadcom as indexes firm
- AI power demand reshapes energy — Data centers plan on-site generation, signaling durable capex needs
🤔 My Thoughts
Credit-Spread Wednesday: Two Behaving, One Managed
Flat or up is a win. Here’s how I managed the outlier.
Yesterday was one of my favorite routine trades: Credit-Spread Wednesday. And if you’re not joining us for Profit Panel on Wednesdays, you’re missing out on great free trade ideas!
The goal of Credit Spread Wednesday is to sell defined risk and let time decay (theta) do the work into Friday expiration.
By late morning today — nearly 24 hours later — two of the three spreads are doing what they’re supposed to do, and one required active management.
The two that are behaving
AMD 222.5/220 put-credit spread: Price has been essentially flat since entry. That’s fine by me. With short-dated premium, “nothing happening” is often the whole point — time decay chips away while price holds above the short put.
NVDA 172.5/170 put-credit spread: Price has moved up and away from our short puts. That’s ideal. When price drifts higher, you get both time decay and distance working for you.
Neither of these needs heroics. I keep my staged exit working and let the clock do its job.
The one I actively managed
For COST, I sold a 937.5/935 put-credit spread. But right at today’s open, COST started selling off hard. This morning it slid through my short and long puts, putting the spread at risk of a max loss if I had just sat on it.
But I don’t. When price drops between my short and long — especially on a high-priced name like Costco — I’m not interested in hoping for a snapback or being assigned the stock.
Instead of using a market order, I worked the exit with a limit order: roughly halfway between the midpoint (the average of bid and ask) and the natural — the price you’d pay if you just took the market (that’s the ask when you’re buying, and bid when you’re selling). That gets me out faster without taking the worst price.
Is it perfect? No. Is it disciplined? Yes. But my job isn’t to be right on every ticker… it’s to keep losses capped and free up capital free for the next setup.
The repeatable lessons
- Have a line in the sand. If price gets between your short and long, that’s a danger zone. I’d rather close and move on than “see what happens.”
- Use limits, not markets. Work the order toward the natural when you need out quickly, but stay in control of the fill.
- Let winners be boring. AMD and NVDA don’t need attention. With two days left, theta is the edge — don’t over-manage.
- Same plan every week. Wednesday entries, Friday expirations, defined risk, pre-staged exits. Rinse and repeat.
One spread doing nothing, one moving in our favor, one managed off the field. As Meatloaf said: “Two out of three ain’t bad”
That’s real credit-spread trading. The win isn’t perfection, it’s consistency: cap the losses, let time work, and live to place the next good trade.
We’re live again today with more trade ideas you can copy:
👉 Click here to watch the on-demand replay!
Alex Reid
P.S. My NEW Scanner has been handing us interesting wins. Now I’m giving it away at no cost! Register here to hold your spot for the World Premiere on Sunday, October 19th!
