Credit Spreads Elastic Rejection Strategy — 95% Win Rate

The “Elastic Rejection Strategy” is a call credit spread strategy when the market is about to crash. This strategy generated a 1,102% return with a 95% win rate since 2003. That’s an average yearly return of 65.62% by following this step by step strategy. So, if you want to make over 50% a year even if you work full-time or don’t know anything about put credit spreads, keep reading 🙂

Let me set the scene and define some terms before getting into the strategy…

Call Credit Spreads are a strategy that makes money when the stock goes down, stays the same or goes up slightly. This is a very reliable and predictable strategy when you trade it correctly. It is typically used by traders to grow their account and generate a consistently side income.

Crashing is when the market is experiencing a double digital percentage downturn in a few days (according to Investopedia). There are signs when a market is about to crash or drop quickly. It is based on simple statistics: standard deviation. When the S&P 500 breaks above the +3 standard deviation, it is expected to drop over the next week or two.

Referencing the image above, you can see a few important things on this stock chart. When the stock crosses above the top yellow line, the stock is hitting its low and in the rejection zone. When the stock is about to fall based on rejection rules, we follow the rules for the “Elastic Rejection Strategy” which are listed below.

The Elastic Rejection Strategy — Instructions To Have A 95% Win Rate

• Wait for the stock to cross above the top yellow line ( +3 standard deviations of the 200 day moving average )
• Determine your short strike price for the call credit spread ( stock close price x 103% )
• Determine your expiration date ( current date + 19 days then round up to the next Friday )
• Setup the trade in your broker (sell to open the short strike price, buy to open the strike price above the short price, and use the expiration determine above)
• Ensure you are collecting at least .15 in credit for placing the put spread
• If you can collect .15, officially place the trade

The key lesson here: trade credit spreads in the direction of the trend!

** To make the trade more profitable, there are a few small tweaks you need to make about refining your entry and exit plan. These tweaks are only available for 10% Credit Spread Inner Circle Members **

Call Credit Spreads, on average depending on the delta you use, have a 70–80% win rate! However, you can increase that win rate to 95% when you trade the Elastic Rejection Credit Spread Strategy! If you want to learn more or have any questions, reach out via email at hello@theimpeccableinvestor.com.

Thanks for reading 🙂
Austin Bouley
CEO & Chief Strategy Officer