What Are SPY Put Credit Spreads?

A put credit spread is a defined-risk, bullish-to-neutral options trade. On SPY — the ETF that tracks the S&P 500 — it's a steady way to collect premium when you think the market will hold steady or move higher.

The trade has two legs, opened at the same time:

• Sell a put option at one strike (this brings in premium).
• Buy a put option at a lower strike (this caps your risk).

You collect the difference as a net credit. As long as SPY stays above your short strike through expiration, both puts expire worthless and you keep the credit. Because you also bought a lower put, your maximum loss is capped and known up front — that's the "defined-risk" part.

I trade these regularly and send trade alerts on each one, and the course covers how to choose strikes, deltas, and expirations. See the track record on our results pages.