Question about “rolling up” from a profitable SPY credit spread into a new credit spread that is closer to the underlying index

Question:   In situations where we click “up” to new Bull Put spreads, what is your opinion of taking the profit on the bull put spreads that are already showing profit and essentially “rolling up” into the new, and closer, bull put spread per today’s advisory?  Does this increase risk too much for the amount of profit potnential?

Answer:   Rolling-up by taking the profit of a spread that already generated profit and rolling the profit into a new spread that has strike prices closer to the underlying index can be a good strategy.  However, the new spread is a separate trade and it has to make sense per all of the analysis that we do.  So when you ask the question –  “Does rolling our profitable spread into a new spread that is closer to the underlying index increases risk?”, as long as the new spread stands on its own per fresh analysis, the risk/reward will be balanced and acceptable.

For me personally, when I feel confident that the underlying index will hold above, or below, my short strike prices of my spreads, and if I have reasonable buffer between the short leg and the underlying index, and if I don’t need to free up the cash, I’ll just let the credit spreads expire worthless.   But if I have any hesitation at all, I’ll close them out early to take the profit and to reduce risk.   Therefore on this trade, I’m probably going to hold onto my SPY Nov 92/94 bull put spreads, and I’ll start bringing in additional premium with the new SPY Nov bull put spread that we recommended in the November 6th advisory

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