Strategy: Sell n Puts, ≤ 56 DTE
Buy n Puts, Lower Strike, 1 Expiration Later
Price Chart: Uptrending
Current IV%: ≥ 60%
IV Rank: ≥ 70
Trade: Sell n put options; buy n put options, later expiration, lower strike.
Typical Strike Deltas:
Short Put ≤ 0.30
Long Put ≈ 2 to 4 strikes lower; based upon strike widths and premium
Goals: Collect premium; a rally in underlying moves both long and short puts farther OTM.
Manage: If possible, roll short puts once. Otherwise, close the trade as it approaches expiration for profit or let it expire worthless.
Profit: Close when profit is at or more than 30 percent.
Loss: Close for an 8 percent loss.