I know the veterans are going to roll their eyes when they read this noob thread but please bear with me. I've been reading through SPX Credit Thread by Phil Budwick: http://www.elitetrader.com/vb/showthread.php?threadid=49586 and apparently he stopped posting in the journal (or at least stopped doing credit spreads) somewhere in 2007. In the beginning he seemed to be on a steady path but at the end he advocated against doing credit spreads to bring in steady income. Just wondering if anybody out there is doing this consistently, especially during periods of high volatility.
These can be good when wanting to make a directional play with limited risk and limited reward off of even small movements in direction or when high volatility makes a purchase of calls or puts alone much less profitable for the price movement you're looking for. The downside is the risk of exercise you may face versus purchasing calls or puts alone without a spread.