15-0 record. $7,072 profit from July
Could you share what the backup plan is if the short option price is breached? Given the large max loss relative to reward
Good question. The backup plan kicks in if QQQ closes below the short strike at expiration.
Rather than taking the full max loss, I close the spread and transition into a Poor Man's Covered Call structure:
Buy a longer-dated QQQ CALL (slightly ITM, ~6 months out)
Sell weekly CALLs at the same strike as the original short PUT
Continue until recovery
This converts the drawdown into an active income position that can reduce or eliminate the loss over time.
Full breakdown here: https://optionplaybook.substack.com/p/put-credit-spread-on-qqq-strategy
The wheel
That makes sense, what if the market continues to trend down more than the collected weekly premium, are you then just working the strike prices down to match your cost basis?
Could you share what the backup plan is if the short option price is breached? Given the large max loss relative to reward
Good question. The backup plan kicks in if QQQ closes below the short strike at expiration.
Rather than taking the full max loss, I close the spread and transition into a Poor Man's Covered Call structure:
Buy a longer-dated QQQ CALL (slightly ITM, ~6 months out)
Sell weekly CALLs at the same strike as the original short PUT
Continue until recovery
This converts the drawdown into an active income position that can reduce or eliminate the loss over time.
Full breakdown here: https://optionplaybook.substack.com/p/put-credit-spread-on-qqq-strategy
The wheel
That makes sense, what if the market continues to trend down more than the collected weekly premium, are you then just working the strike prices down to match your cost basis?