What to trade with credit spreads

I have been asked numerous times how do I find my stocks to trade credit spreads on? Traders that are new to this strategy especially like to ask that question. And I will tell you that I have set up a watchlist over the last few years and trade from my watchlist when I see possibilities arise; however that is not the monthly money maker for credit spreads.

I really use credit spreads on the indices and ETF’s, especially the SPY and the IWM (iShares). These are the most reliable for me to trade credit spreads on a consistent basis. Today was a big day for me as it confirmed for me that we are definitely in a BEAR trading market. The DOW broke 13,000, the SPY broke 145, looking at the trend lines we are bearish. SO this would bring out more bear call spreads. Look at IWM It has not been able to break 85 the ceiling and stay there, it has been on a downward trend ever since. The next support/resistance is 82 to 82.50, then 80 and now 77.50. I personally like the looks of a DEC 82/83 Bear Call Credit Spread. You can get it for about .10, not a lot of income, but a good safe trade for about a 11% gain for 30 days.

credit spreads, downward trend, iwm, support resistance