Welcome Testa! That was my main strategy as well for options...until october. Had a few iron condors and some bear call spreads and was rocked by that uptrend on SPX and RUT!! Took me for a good ride, and then decided to trade the eminis so I didn't have to have a bias that remained in place for a month or two at a time.
Credit spreads were good to me up until then, though, and I think that overall spreads are a good place to trade. Hopefully we'll be able to open up some discussions on this forum
Torero, as far as how one approaches putting on a position...this is how I look at it. First, see if we're trending...if so, sell a position to benefit you in that trend. Uptrend...sell a put spread. Downtrend...sell a call spread. If we're kind of in a range (which I would suspect we're starting to see happen now after that mega uptrend since July) Iron Condors are great in that kind of market. There, you're picking two areas to sell both a call and a put spread. For instance...look at a chart of the SPX... selling a 1350/1340 put spread and a 1420/1430 call spread would prove to be a nice way to go.
Why? You've got 3 areas of support and a 50Day MA to break through before you'd be taken out on the downside and start to lose money. Now, if we're at 1341 on expiry, you're getting the full credit. I will close my positions between 4-10 days prior cause the vega exposure is too great. That means that the delta is moving so fast as it comes on to expiry it can either really help your position, or really kill it. 4-10 days gives you good time.
For the call spread in the IC, that area is a bit above where we're at now...and it looks like a top is forming. We've been seeing some real rocky trading lately, and the trend is seemingly sideways for the time being, and then I'd love to see a nice correction down to the bottom of the IC. At that point, it's gonna take some time to get back up to around that 1400-1420 level, and by then you could have exited that call spread with profit and if we're around 1400 or higher by expiry (january)...then let that one expire worthless.
There are a few volatility models to show you expected percentages of probailities, and one that I use is in my ThinkorSwim platform. It'll basically say that based on past performance, this option has xx% chance of expiring worthless, which is what we want when selling spreads.
Hope that helps a little bit....
Chris