Arithmetic from the specification above — sell the 95 put, buy the 90, 45 days out, 25% volatility, 4% rate. Not a measured result.
| Closing at 50% | Holding to expiry | |
|---|---|---|
| Profit per trade | About half the credit | The full credit |
| Time in the trade | Shorter | The full tenor |
| Exposure to the last week | Usually avoided | Always carried |
| Trades per year | More | Fewer |
| Costs | Two commissions and a spread crossed | One commission, often nothing at expiry |
This site has not run it, so this page does not answer the question. Here is the specification that would.
The rule’s third claim depends on redeploying capital. If there is no next trade that meets the filter, closing early just means sitting in cash — and the comparison changes with how many qualifying setups the market is offering. A verdict here is quite likely to name a condition rather than a winner.
We haven’t published a result and won’t state one before the run. The honest position is that the rule is plausible, widely repeated, and untested by us.
Convention. It is a round number that spread through options education, and the test that settles it should run several levels rather than only the famous one.
Yes, by construction — you are leaving part of the credit on the table. The argument is entirely about what you do with the time and capital you got back.
Unlikely. The maximum profit on a debit spread is not the premium, so the same sentence means something different there. The rule is a credit-trade rule and gets quoted as if it were universal.
Not answered yet, deliberately.
The exit ladder run is the one that settles it, and this entry will link to it the day it publishes. If the answer is that holding to expiry wins under our specification, that is what will be published.
