How I Saved $500+ on Failing Put Credit Spreads

In this video we discuss how I saved over $500 in 24 hours by adjusting my failing QQQ Put Credit Spreads into an Iron Condor and Iron Butterfly. ------------------------------------------------------------------------- This communication/content is for informational purposes only and is not intended as personalized investment advice, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This communication should not be relied upon for purposes of transacting in securities or other investment vehicles. Trading options carries a high degree of risk and may not be appropriate for all investors. Options can lose value rapidly and a position may expire worthless. Some strategies can result in losses greater than your original investment. Past performance is not indicative of future results. This video is for educational purposes only and should not be construed as financial, investment, tax, or legal advice. Consult your personal financial advisor or other qualified professional before making any investment decisions. Do not trade with capital you cannot afford to lose. ------------------------------------------------------------------------ Join Income Academy Today! ------------------------------------------------------------------------ You can save a failing put credit spread by selling premium on the unused side (iron condor) or centering risk around price (iron butterfly) to bring in extra credit, reduce max loss, and widen or shift your breakevensat the cost of adding new risk. Step 1: Know your starting PCS Example starting trade (your usual style): Underlying: QQQ around 420 Original put credit spread: short 410 put / long 405 put, same expiry, 5wide Original credit: 1.40 Original max loss: 5.00 1.40 = 3.60 per spread Now QQQ sells off toward or through 410 and the spread is failing. Turning it into an iron condor Mechanically, you add a call credit spread above price, same expiry, preferably same width and size. Using the example: Add call credit spread: short 430 call / long 435 call for 0.75 credit New total credit: 1.40 + 0.75 = 2.15 New max loss (on either side): 5.00 2.15 = 2.85 What this does for you: Reduces worstcase loss from 3.60 to 2.85 per spread (you bought down max loss by 0.75 using callside premium). Increases max profit from 1.40 to 2.15 if the whole iron condor expires OTM. Widens your effective downside breakeven because you collected more total credit on the put side. When it makes sense: Youre already near resigned to a big loss on the put spread and want to reduce that outcome. IV is still decent on the call side so the added credit is meaningful (not just a few pennies). Youre okay becoming more neutral and taking some callside risk if the market rips back up. Core cautions: You now have risk on both tails; a violent Vshaped move can still hurt. Dont overtighten the call spread; try to keep the same width and contracts so youre not increasing defined risk, just redistributing it. Turning it into an iron butterfly An iron butterfly is just a narrow iron condor with the short call and short put at the same strike (usually near or atthemoney). Conceptually: Iron condor: short put and short call at different strikes, gives you a wider profit range, lower peak credit. Iron butterfly: short put and short call at the same strike, high peak credit but narrow profit zone around that strike. Adjustment from a failing put spread can look like: Price has moved a lot; say QQQ has sold to 410412. You roll or recenter so that your short put and short call are at or very close to current price (e.g., short 410 put, short 410 call, long wings above and below). Because all the extrinsic value is concentrated around ATM strikes, you take in a larger net credit than a wide condor, which further reduces max loss versus just holding the original put spread. What this does for you: Brings in more credit than an equally wide condor, so in theory it can cut loss more aggressively. Makes the position strongly short volatility around that central strike (you want price to stall/chop near there). When it makes sense: Underlying has already moved a lot and is hanging near a level you think will become a magnet. IV is elevated, so ATM short straddles risk pays very well in credit. Youre comfortable with a narrower win zone in exchange for a bigger credit and loss reduction. Practical rules of thumb From common pro guidance and adjustments material: Same width, same size: If you add the opposite side, match the width and contracts so total defined risk per condor stays constant; extra credit simply lowers max loss and shifts break-evens.