Strategy: Sell n Puts, ≤ 56 DTE
Buy n Puts Higher Strike, Same Expiry
Price Chart: Downtrending
Current IV%: ≤ 25%
IV Rank: ≤ 30%
Trade: Buy n put options; sell n put options lower strike.
Typical Strike Deltas:
Long Put ≈ −0.55 to −0.35
Short Put ≈ 0.25 (should be outside 1 standard deviation).
Goals: Strong price drop that moves long puts deeper ITM for profit; premium from OTM short puts used to reduce entry cost.
Manage: If possible, roll short calls once. Otherwise, close the trade or let it expire worthless.
Profit: Close when profit is at or more than 30 percent.
Loss: Close for an 8 percent loss.