As you can see from my trades in the table below April 2018 was a losing month. This is a great example of when things go bad -- and they always do. Honestly, this was not even a bad month compared to other bad months. Based on an average net credit of $0.23 it will take 5 winning SPY Put Credit Spread Trades to get back the losses from this month.
|Ticker||Type||Spread||Expire Date||Open Date||Closed Date||Open Credit||Closed Debit||Profit / Loss|
|SPY||PUT||262 / 264||04/02/18||02/27/18||04/02/18||$0.21||$2.00||-100.00%|
|SPY||PUT||262 / 260||04/06/18||02/28/18||04/05/18||$0.23||$0.40||-10.4%|
|SPY||PUT||256 / 258||04/20/18||03/07/18||04/17/18||$0.26||$0.03||12.41%|
|SPY||PUT||264 / 266||04/27/18||03/13/18||04/05/18||$0.26||$0.52||-30.69%|
|SPY||PUT||261 / 263||04/20/18||03/14/18||04/16/18||$0.23||$0.18||2.03%|
|SPY||PUT||251 / 253||04/20/18||03/22/18||04/16/18||$0.21||$0.03||9.27%|
|SPY||PUT||250 / 252||05/04/18||03/23/18||04/27/18||$0.29||$0.03||14.39%|
|SPY||PUT||244 / 246||05/11/18||04/06/18||04/27/18||$0.23||$0.03||10.51%|
|SPY||PUT||251 / 253||04/27/18||04/11/18||04/17/18||$0.22||$0.03||9.89%|
My rule of thumb is to always close trades at the end of day if the current SPY stock price is below the short strike of my SPY Put Credit Spread.
While it might be painful it is much better to lose a small amount of money than lose 100% of the money. One of my trades got completely away from me (the 100% loss) -- while one of my trades was only a 30% loss as I was able to close it before it got too far past the short strike of my Put Credit Spread.
This month was an opportunity to remember to be humble in this trading strategy. As a reminder it is important to always be prepared for down months.