It's been a while since I've done one of these, so in this thread I will deconstruct ADFs (@team3dstocks) credit spread #Thufrirule trade from this past week. Let's start with Monday, prior week had huge selloff after fed meeting, open interest on puts was still decent -
Here is the day (tues) ADF sold the first part at 395 & 390, the open interest on the 390 almost doubled this day. Notice the volume profile on the options at this point in time, along with the volume profile on $SPY. Supply and demand is clear.