Rate my trade idea — SPY bull put spread

[Dave K. (Demo)]

Okay, be gentle. I’m looking at selling a bull put spread on SPY — short the 585 put, long the 580 put, about 30 days out, collecting around $1.20. Thesis: the market’s beaten up after the Fed hike, SPY tends to find its feet, and I keep the risk defined. What am I missing?

[Priya S. (Demo)]

Not a bad structure for a beginner — defined risk is exactly right. Two things I’d check: where’s implied volatility right now? After a Fed week it might be elevated, which is good for sellers. And what’s your plan if SPY breaks below your short strike — adjust, roll, or take the loss? Decide that now, not later.

[Marcus T. (Demo)]

Agree with Priya. Only thing I’d add: 30 days out is fine, but watch how fast theta decays in the last two weeks — that’s when the magic happens, but also when gamma risk spikes. Maybe paper trade the management part first.

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