The key is to position the strikes far enough to expire worthless, but close enough to earn some premium. This recent drop will be a test for many credit spread methods.
It seemed like a lot of traders unwound their credit spreads on friday for a loss. I hope they come back soon, vols are so high right now
The markets never stop to amaze me, I make one prediction on ET and it blows up in my face! The Aug settlement prices are: SPX - 1,450.11 NDX - 1,876.33 RUT - 802.72 So that's 1 out of 3 (thanks to the Fed)!