Letters To S&C by Technical Analysis, Inc.
OPTION CREDIT SPREADS
I just read Sam Bhugaloo’s article on
option credit spreads in the STOCKS &
COMMODITIES annual Bonus Issue. The
article was well written, easily understood,
and fascinating. I would like to
know if there are any other articles
available by the same author.
I have a question relating to the article:
When trading option credit spreads
on commodities, how many front months
should I be considering?
Sam Bhugaloo replies:
I am pleased you enjoyed the article.
When trading bull put option credit
spreads or bear call option credit
spreads, you should consider the commodities
with 50–90 days’ expiration.
Remember that time decay is your friend,
so you don’t want to trade months that
are too near or too far out.
I have had two articles published
previously in S&C magazine: “The
Power Of Implied Volatility” (July 2006)
and “Watch The Commercials” (October
2006). I believe both of these articles
can be purchased from the STOCKS
& COMMODITIES online store at