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I’ve been getting questions lately about why we’re seeing more pending orders and fewer immediate fills on our credit spread strategies. It’s a great observation — and there’s a clear reason behind it that every trader needs to understand.
The market environment has changed significantly from earlier this year, and that shift is directly affecting how our trades execute. Let me walk you through what’s happening and why it matters for how we’re positioning right now.
Why Lower Volatility Means More Pending Orders
Earlier this year, we were operating in a much different volatility landscape. When the VIX was running between 21 and 30, we could use the same 10% buffer and still collect 50 cents in credit — sometimes even more. Elevated volatility gave us wider expected moves and richer premium, which made fills almost effortless.
That’s not the case anymore. With the VIX sitting between 15 and 20, premium has compressed. Lower volatility means the market has to drift closer to our strikes before we can collect the same credit. That alone accounts for the increase in pending orders — so the environment has shifted but not the strategy.
This also means capital can stay tied up longer while we wait for price to come to us. That’s an intentional choice right now. I still expect this market to make a serious run at all-time highs, so I’m comfortable placing more pending orders even if they take longer to fill.
And while it’s tempting to chase 75-cent or $1 credits, doing so in a low-vol environment often leads to very few fills. In practice, aiming for 50 cents is the sweet spot — consistent, realistic and aligned with the current volatility regime.
The 10% Buffer, the Profit Trap and Real Risk
There’s a reason the 10% buffer remains our anchor point. Historically, that’s where markets tend to find a pain threshold — a level where selling pressure often slows or reverses. When price slides into that zone near expiration, we can sometimes pick up a bonus profit as premium collapses. I call that the “profit trap.”
But it’s important to be clear: While the profit trap is a great upside surprise when it happens, it’s a low-probability scenario — typically under 5%. One good trap can offset several losing trades but you never build a plan around catching them. You stay mechanical, take the base hits and let the rare upside come to you when it can.
For traders targeting aggressive daily income — like $1,000 a day — understand the real math. A 50-cent credit risks $4.50 in a $5-wide spread. Doing that with 20 contracts gets you the $1,000 but it also carries a $9,000 max-risk profile. That’s why sizing discipline matters more than credit targets.
One final reminder: Be careful not to overlap strikes or stack too many pending orders in the same expiration. Using varied expirations and avoiding clustered strikes keeps your risk from compounding without you realizing it.
Stay patient, stay mechanical and remember that the market environment drives execution just as much as strike selection does.
I’ll see you in the markets.
Chris Pulver
Chris Pulver TradingÂ
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.Â
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