Credit put spread analysis · · Good setup
Recommended credit put spread
AI-suggested setup based on the latest screen. Expiration Jun 25, 2026.
- Width
- $3.00
- Estimated credit
- $1.30
- Max risk
- $1.70
- Return on risk
- 76.5%
- Expiration
- Jun 25, 2026
For entertainment purposes only. Not a recommendation to trade. Disclaimer.
Earlier analyses
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The stock's sharp 5.15% drop on a day when the broader market was down is a concern, but the overall context makes this a weak setup for a credit put spread. The stock is still up a massive 35.5% over two months, indicat…
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The setup is weak and does not meet our criteria for a moderately aggressive, lean-OPEN approach. The stock has dropped -5.15% on the day, but this comes after a massive 35.5% run-up over just two months, suggesting sign…
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The stock's profile presents significant challenges for a credit put spread at this moment. While the -5.15% drop creates a potential entry point for a moderately aggressive trader, the overall context is concerning. The…
AI analysis
Options Trading Expert · May 17, 2026
The stock's sharp 5. 15% drop presents a potential entry point for a moderately aggressive trader, but the overall context introduces significant concerns that cap the rating. The stock is still up 35.
5% over two months, indicating a pullback within a strong uptrend, which is favorable for selling puts. However, the 'Safety' score of 5/9 is mediocre, and the elevated IV of 59% suggests high volatility, which inflates premiums but also indicates higher risk. The lack of a reversal signal suggests the downtrend could continue, increasing the chance of the short strike being tested.
A credit put spread can capitalize on the high IV and the expectation that the uptrend will resume, but the risk of further decline is real. Given the moderately aggressive temperament, a spread can be structured to provide a decent risk/reward, but it should be placed cautiously, further out-of-the-money than usual to account for the recent volatility and weak safety score. The credit-to-width ratio target is achievable, making this a decent, but not strong, setup.
A more conservative trader would wait for stabilization, but leaning OPEN is justifiable with careful strike selection.