SPY Bull Put Spread: Quick-Start Checklist

Five steps from reading a signal to managing the trade. Educational content: it describes how a defined-risk put spread is placed and managed, it is not a recommendation to trade. Start with a paper-trading account and follow two or three signals before using real money.

1Read the signal

Expiry and the two strikes: you sell the higher put and buy the lower put, always together as one spread.
Credit: the amount you receive per share (x100 per contract).
Take-profit price (half of the credit) and stop price (1.5 times the credit), written down before you enter.
Maximum loss = (strike width - credit) x 100 per contract.

Example from our paper log (1 Oct 2026): sell the 695 put, buy the 685 put, 29 Jan 2027, credit $1.23. Take profit at $0.615, stop at $1.845, maximum loss $877 per contract.

2Check the trend filter

SPY below its 200-day EMA: no trade.
SPY above its 7-, 30- and 200-day EMA: expiry about 60 days.
SPY above the 200-day EMA but below a shorter one: expiry about 120 days.
Use the daily close, not the intraday price. A filter reduces exposure, it does not remove the risk of a gap.

3Size by what you can lose, not by what you collect

Decide the total maximum loss you can accept across all open positions together.
Contracts = that total divided by the maximum loss of one contract (rounded down).
With the example above ($877 per contract) and a $2,000 total budget, that is 2 contracts, not more.
Remember the premium is small compared with the risk: the example risks $877 to make $123.

4Place the order and set the exits

Enter a vertical spread as a single order with a limit price at the credit. Never "leg in" with two separate orders.
Place the take-profit order (buy the spread back at half of the credit).
Set the stop as an alert or a stop order on the spread price (not every broker supports stop orders on spreads: if yours does not, use alerts and act on them).
In fast markets a stop can fill worse than planned. Size as if it might.

5Manage and review

SPY options are American style: the short put can be assigned early. Close the spread before expiry.
Do not add to a losing position to recover it.
Log every trade (date, strikes, credit, exit, result). Once a week, look at the average win, the average loss and how many positions were open at the same time.

Common mistakes

Sizing by the credit instead of the maximum loss.
Opening many positions at the same time: they can all lose in the same week.
Moving or removing the stop after entering.
Trading when the trend filter says no.

Want the reasoning behind each step? Read the complete SPY bull put spread strategy guide, or see every signal we logged, including the stops, on the performance page (paper trading).

If you would like one such signal on Telegram every market day: 15 days free, then $19.99 per month, cancel anytime (card collected at checkout, nothing charged during the trial).

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FIREDesk content is for educational purposes only and is not financial advice. Options trading involves significant risk of loss, including the loss of the whole amount at risk. Results shown are paper trading with modeled prices; past and simulated results do not guarantee future performance. Disclaimer · Privacy