Certainly not a bad thought to supplement the credit spreads with some long debit spreads if you are bullish leading into the end of the year. I will look into it and see if it is worth it.
Two reasons I might not do it are:
(1) I am bullish going into the end of the year but I have no guesstimate as to what magnitiude the market is going to move. I simply feel we will be sideways or higher and maybe slightly lower which still results in a profit for me. Buying the call spreads means I have to make a determination as to what magnitude I expect the market to move from now until DEC expiration. One reason I like the credit spread strategy is it takes a lot of this directional guesing game out since I can be right in general about direction but do not have to worry about magnitude of the move or even if I am slightly wrong. So I may not choose to do the call spreads simply to avoid trying to determine how far the market could move.
(2) Based on (1) above, I may also be less inclined to enter a debit spread and spend some of my credit whcih I expect to expire worthless.
Now debit spreads can be done with the new mini-SPX perhaps quote cheaply for a small bet so I will not rule it out nor recommend that you should forget it. If you have the put spreads, then one approach is to say that the long call spread is completely financed by the puts and therefore is taking a bet with some house money lol. If the market explodes higher you are enhacning your return, if it does not move as high you still can have a net profit with the put spread credits.
Therefore, although I generally would not add the debit spreads on the call side given my bullish stance, I think there are certainly compelling reasons to use a small part of the credit and swing the fences at this time of the year. I will probably avoid any call credit spreads due to fears of huge rally at end of year, but a small debit spread might be appropriate under these circumstances.
EDIT: Looking at the mini-SPX there are not a lot of strike prices and the SPX for DEC is a little pricey for debit spreads unless you are willing to go above 1250 or 1260 for the long strike in the bull call spread. Even then it still is more than $1.00 for the $5.00 spreads and even pricier for 10 and 15 point spreads.
Phil
Quote from andysmith:
Coach,
How about using, say, 20% of your DEC credit and buying some SPX 1250/1260 (or something like that) bull call spreads?
..so went with door#2 and sold 10...of course got only 2.5 on 10 so now credit is (lets see effectively 1.75 if that were 20 contracts less .55 so 1.25..sort off
)