← All articles
Strategy
The 0DTE Credit Spread: Directional Premium Selling
The credit spread is the building block of most 0DTE income strategies — a defined-risk way to sell premium in one direction.
NoVo Options Trading · 2026
Educational only, not financial advice or a strategy recommendation. Options strategies carry risk, including of substantial loss. NoVo trades long single options; the strategies here are explained for understanding, not endorsed.
A 0DTE credit spread sells an out-of-the-money option and buys a further one for protection — collecting premium on a directional-or-neutral view with defined risk. It’s the building block of the condor and fly.
How it works
Sell an OTM option (call or put) and buy a further-OTM one of the same type — you collect a net credit. A put credit spread (bullish/neutral) profits if SPY stays above the short put; a call credit spread (bearish/neutral) profits if SPY stays below the short call. Max profit is the credit; max loss is the strike width minus the credit — both defined.
Why traders use it (and the risk)
Credit spreads let you profit from time decay and a favorable-or-flat move, with capped risk (better than naked selling). But like all premium selling, the risk exceeds the reward per trade — you win often but lose more when wrong, so discipline and management are essential. On 0DTE, breaches happen fast.
A credit spread sells premium with a safety net: capped risk, capped reward, and a bet that price stays on your side of the short strike.
How NoVo differs
NoVo buys long options (debit, directional) rather than selling credit spreads. Credit spreads are a valid, defined-risk premium-selling approach — a different style from NoVo’s. See credit vs debit spreads and selling vs buying premium.
More on this: The Diagonal Spread and 0DTE: A Directional Time Play · The Box Spread, Explained (and How Traders Blew Up With It) · How Wide Should a Vertical Spread Be on SPY 0DTE? · What Is a Spread in Options?
Ready to put it to work?
NoVo reads the full tape and maps every dealer level live — the market intelligence no human can track by hand — then executes any trade in one click. Trade beside it, or just take the daily read.
NoVo Trader · $169/mo
Trade it in one click.
The cockpit maps every dealer level on your chart and executes your Buy Calls / Buy Puts in one click — it picks the strike, sizes it, and manages the stop and the exit ladder. You decide every entry. Non-custodial, in your own broker.
Start NoVo Trader →
NoVo Analyst · $79/mo
Just want the read?
The live dealer map — dealer positioning, options flow, and in-house sweeps & block prints — plus a written market read every session, to your inbox, the dashboard, and the private Analyst Discord. Structure, levels, and the order-flow footprint.
Get NoVo Analyst — free trial →
NoVo is a software tool for market analysis and for executing trades you initiate, not financial advice. This article is general education, not investment advice. Options trading involves substantial risk of loss, up to and including your entire capital. NoVo makes no guarantee of profit, win rate, or performance, and past results do not predict future outcomes. You are responsible for your own broker account, configuration, and trading decisions.