The "3 Rules" for Consistent Monthly Return with Credit Spreads

1. NEVER EVER do a credit spread when that stock has earnings during that option cycle.

2. NEVER EVER play FDA or other government agency announcements.

3. If a credit spread has an unusually high return for a little risk - DON'T TAKE IT, Trust me there IS a reason for the increased volatility... Someone somewhere knows something, Just move on to a more "normal" return trade.

Walmart Calendar

Walmart is a great shopping alternative in the current economy. It should outperform other retailers in the coming months. So lets try a bullish calendar to capture some upward movement.

BTO 3 WMT Mar/Jun 57.5 Call for $.90

The plan is wait till March expiration to buy back the March short and then sell April and then hopefully the May.

AZO Earnings Calendar Exit

Autozone has not stayed flat like I hoped. It has trended higher and ascending triangle has formed. I looked at making adjustments to the trade but it doesn't like I can get a favorable risk to reward. So its time to get out. One of the things that went wrong was the fast moving price action that didn't allow for time decay to work in my favor.

STC 2 AZO Feb/Mar 135 Call for $4.30
for a loss of $110 or 12.8%

IWM Iron Condor Result Followup

WOW, IWM made a awesome rally this week. It's time to take the trade of the table so we can lock in on the profits.

2/6 BTC 2 Feb 39/37 put for $0.08
2/6 BTC 5 Feb 59/61 call spread credit $0.02
1/30 BTC 3 Feb 39/37 put for $0.20
1/7 STO 5 Feb 39/37 put spread credit $0.20
1/7 STO 5 Feb 59/61 call spread credit $0.21

Total profit was $119 on $795 risk for a ROI of 14.9%