If you work full-time or have a busy schedule, trading vertical credit spreads can be an ideal strategy to generate income without requiring constant monitoring of the market. A credit spread involves selling an option with a higher strike price and buying an option with a lower strike price of the same expiration date, resulting in a credit to your account. This strategy limits potential losses and provides a defined risk-reward ratio.

Here are some tips for trading credit spreads when you have limited time:

1. Choose a reliable broker: Make sure to select a broker that offers a user-friendly trading platform with advanced charting capabilities and order entry functionality. Also, ensure the broker has low fees and provides access to a wide range of options with tight bid-ask spreads.
2. Set up trade alerts: Set up alerts on your broker’s trading platform to notify you when an opportunity arises. You can set up alerts for price movements, volume changes, or other indicators that you find useful. This way, you can monitor the market without being glued to your computer screen all day.
3. Use limit orders: To execute your trades efficiently, use limit orders to ensure you receive the best possible price. You can set up limit orders to automatically execute your trades when the price reaches a certain level, saving you time and effort.
4. Manage your risk: Always have a plan in place for managing your risk. One way to do this is to set stop-loss orders to limit your potential losses. You can also use position sizing to ensure you don’t risk more than you can afford to lose.
5. Stick to your trading plan: Develop a solid trading plan and stick to it. Don’t let your emotions get the better of you and deviate from your plan. Consistency is key in trading, so make sure you follow your plan and adjust it as needed.
6. Learn from your trades: Keep a trading journal to track your trades and learn from your successes and failures. Analyze your trades to see what worked and what didn’t, and adjust your strategy accordingly.

My Two Favorite Methods That I Teach My Credit Spreads Alert Members

There are two ideal methods that I teach to my Inner Circle members who work full-time: alerts and limit orders. Trade alerts help you monitor the market and enter trades without needing to be stuck to your screen. You can set up alerts on your broker or by signing up for a profitable alerts service like the Inner Circle Credit Spreads program that I run. Lastly, limit orders are one of the greatest tool for busy traders. You can place a limit order before you go to bed, leave for work, or during market hours. Limit orders allow you to enter without needing to be present, and you can do the same thing when you try to exit.

In conclusion, trading vertical credit spreads can be a profitable strategy for those with limited time. By following these tips, you can manage your risk, execute trades efficiently, and learn from your trades to improve your strategy over time. Remember to always have a plan in place, and don’t let your emotions cloud your judgment. With discipline and patience, you can successfully trade credit spreads and generate income while working full-time or having a busy schedule.

Thanks for reading 🙂
Austin Bouley
CEO & Chief Strategy Officer