Earning $2,500 Per Week Using Credit Spreads and Weekly Options… Part 2

Pros and Cons of the Credit Spread Strategy in SPX Options Trading

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In Part 1 of this article, we explored the overnight risks in the S&P 500 (SPX) and uncovered a timeline of market turbulence and tranquility. We observed how certain years saw overnight losses, while others remained remarkably stable. However, there’s more to the story than just the overnight risk. In Part 2, we will explore the “wait until expiration” risk. Is it worth the wait, or do investors have more to consider? Let’s explore.

Recap of Part 1

Part 1 of our analysis revealed some intriguing insights into the overnight risks associated with the S&P 500. We observed the following:

• A decade of stability (2000–2017) with no instances of overnight losses exceeding 1%.
• Isolated mild losses in 2018 and 2019.
• A dramatic spike in overnight losses in 2020 attributed to the COVID-19 pandemic’s impact.
• A mixed bag of results in 2022, indicating a somewhat turbulent year.
• A return to stability in 2021 and 2023, with no overnight losses exceeding 1%.