Pretty much all the sayings you hear about them are true: Picking up pennies in front of a speeding train It works until it doesn't One loss cancels out months of gains The problem with it (and all simple, high-probability, high-risk/low-reward option strategies) is it's addictive. You make profits for a few months and think you're a genius and forget what can happen. And you also imagine yourself making some great adjustment (rolling out, etc.) but the market keeps tanking and making things worse. Ask those who traded them in Feb. or Dec. of 2018 (not to mention real bear markets).
While there is good, basic teaching on such sites, I'm not convinced the TastyTrade/Options Alpha approach (tons of small trades, hopefully most are modest winners, etc.) even beats buy-and-hold unless you take too much risk (trade too big, not diversified with enough trades, etc.). There's a good thread on Options Alpha here (just search for "Options Alpha Reddit" if my link doesn't show up) This is especially true for smaller retail traders. And it's A LOT MORE work than buying and holding. Also, good luck if you have a day job and you need to close 15-30 trades as the market crashes while you're in a meeting or travelling or something.
I was doing some testing on vertical credit spreads earlier this year. Typically 6wks to expiry, selling nearest strike to the money then buying next strike away. Correct trades gave me around 50-60% return. On a loss, what I really liked about them was that they seemed to hold their value for the first 2 or 3 weeks before eroding to expiry. So you sort of get a low cost look at them for a bit and can close out. I seemed to be able to average lower or equal losses to my wins by closing out if my technical view wasn't validated in this time frame. I considered these (approx) ATM credit spreads a simple bet on whether price would finish above or below the current price in 6wks. As a technical analyst this is a very attractive series of bets. It basically becomes a test of your win rate from a simple TA view, in which I consider I have a positive expectancy. At this point I haven't done enough trades to reach conclusions, that's on a future project list. But credit Spreads look really promising and anyone with expertise in TA I'd encourage to test these. If you dont have any edge in selecting trades or when to exit then these are not for you.
Don Fishback offers a service of credit spreads that claims good results https://www.donfishback.com/odds-high-accuracy-monthlys-no-risk/ I´m still deciding with ZBZB if it works
Note that I only recommended the available education, and not anyone's specific approach. On that topic, going with what someone else tells you to do is a close equivalent to following the "advice" from the media... and I've already stated my perspective on that.
It's worth noting that this perspective - and essentially all negative perspectives on this topic - are applicable to every single kind of trade, or any other investment decision. All of them involve risk, and none of them guarantee an edge. I'm not sure why they're being brought up here, as though they were especially applicable to the OP's question. (Edit: not picking on you, @MKTrader - just noting your post as one example of many that does this.)
Your experience is not implicit in your original post; in fact, the number of obvious errors in it (a delta of .70 - never mind that deltas are typically stated as whole numbers, "100 width spread", 25% credit, etc.) strongly imply the direct opposite. If I'm going to make a trade with a 30% probability of return, I'm looking for a credit of at least 1/3 the spread width; that is, a 33%+ return on my risk. As an example, here's one I could take in SPY right now: As you can see, the short strike is at a delta of 30, and the credit is well over 33% of the $1-wide spread. SPY is at a reasonably high IV rank right now, and a significantly high IV% (35.4/68.4), so I have a fairly high chance of IV collapsing while the trade runs. That's the kind of edge I'd be looking for in this type of trade, and the reason that they have a high overall probability of success. (Incidentally, I would not use stops here - it's a defined-risk trade with a max loss that I find acceptable. But stops can be useful for lots of other trades; it's just another calculation, with PoT being ~2x delta, that can be a useful tool. There's a reason this asset class is called "options"; this, in itself, should provide a very strong clue that there are no pat answers here - only sets of compromises between pros and cons.)
@cmukesh19 to share my two-pence worth, I post below my experiences of credit spreads from last year alone : No of trades : 43 (each trade comprised of many lots) Profitable trades : 31 (72%) Traded on : 17 different commodities (eg CL, ZM, GC, EUR, SB, etc etc), but no equities Average days trade held : 36 Average profit across all trades : +6.4% The key figure for me is the +6.4%. I held on too long onto some 100% losers (KC is terrible for this sort of thing I discovered) but was very happy with the overall result. I then left credit spreads and started trading the underlying futures directly (much faster response times). Credit spreads are just a tool which are no better or worse than any other options strategy - in the same way that a screwdriver is no better or worse a tool than a spanner in the toolbox of a plumber. It just depends on what the job at hand requires. Personally, I like them, and I have been doing OK with them. The key is to be as right as possible about the direction of the underling. Good luck.
You're underwriting disaster insurance. So either be in the underwriting business and receive the multiple that entails, or trade ATM vol. Both can be viable business models, but one has a much higher ROI.