Credit the Sell-off

This is a discussion of the "Credit the Sell-off" strategy.

Credit the Selloff is a bullish strategy that sells a put credit spread when a stock is deeply oversold (14-day RSI below 25) and flat or down for the day, exiting when 50% of the credit is captured, RSI rises above 40, or earnings are two days away—whichever comes first.

Overview

• Short Put Spread
• 2 legs

Credit the Sell-off Strategy Settings

Credit the Sell-off Open Conditions:

• 14 Day RSI below 25
• On the day, the stock moves down 0% or more
• On a scale of 1 to 5 (best) the minimum liquidity for an option trade is 4

Details on Options TradeMachine is Selecting for Credit the Sell-off Strategy:

• 1x short 50 delta call near 30 days to expiration
• 1x long 40 delta call near 30 days to expiration

Earnings Handling for Credit the Sell-off Strategy:

• Never Trade Earnings

Credit the Sell-off Close Conditions:

• 14 Day RSI above 40
• Close 2 days before earnings
• Gains are above 50%
• Options reach expiration

Open next trade for Credit the Sell-off:

• At Normal Time