OPEN-SOURCE SCRIPT
ATR% Credit Spread Strike Guide
This indicator helps options traders quickly estimate the **nearest reasonable short strike area** for a credit spread using an **ATR-based distance model**.
It calculates the stock’s current **ATR%** and applies a user-defined multiple, then plots horizontal reference levels from the current price:
* **Lower Min Price** for the put side, useful when evaluating **bull put spreads**
* **Upper Min Price** for the call side, useful when evaluating **bear call spreads**
The goal is simple: instead of using a flat percentage for every stock, this tool adjusts the minimum strike distance based on the stock’s recent daily movement.
### How it works
* Uses **ATR over a selectable lookback period** (default: 20)
* Converts that movement into a percentage of price
* Applies a selectable **ATR% multiple** (1x to 4x, default: 3x)
* Draws a **horizontal line** at the current upper and/or lower threshold
* Optional labels show:
* ATR%
* Total distance %
* Current level price
### Why use it
A flat 5% rule can be too tight for volatile names and too wide for calmer names. This script gives a faster way to visualize a volatility-adjusted threshold before checking the actual option chain.
### Practical use
* Use the plotted level as the **closest strike area worth considering**
* Then confirm:
* option premium is acceptable
* return on risk meets your plan
* the strike still makes sense relative to expected move, trend, and support/resistance
### Important note
This is a **charting aid**, not a trade signal. It does not account for implied volatility, expected move, liquidity, earnings risk, assignment risk, or probability of touch. Always confirm with the option chain
It calculates the stock’s current **ATR%** and applies a user-defined multiple, then plots horizontal reference levels from the current price:
* **Lower Min Price** for the put side, useful when evaluating **bull put spreads**
* **Upper Min Price** for the call side, useful when evaluating **bear call spreads**
The goal is simple: instead of using a flat percentage for every stock, this tool adjusts the minimum strike distance based on the stock’s recent daily movement.
### How it works
* Uses **ATR over a selectable lookback period** (default: 20)
* Converts that movement into a percentage of price
* Applies a selectable **ATR% multiple** (1x to 4x, default: 3x)
* Draws a **horizontal line** at the current upper and/or lower threshold
* Optional labels show:
* ATR%
* Total distance %
* Current level price
### Why use it
A flat 5% rule can be too tight for volatile names and too wide for calmer names. This script gives a faster way to visualize a volatility-adjusted threshold before checking the actual option chain.
### Practical use
* Use the plotted level as the **closest strike area worth considering**
* Then confirm:
* option premium is acceptable
* return on risk meets your plan
* the strike still makes sense relative to expected move, trend, and support/resistance
### Important note
This is a **charting aid**, not a trade signal. It does not account for implied volatility, expected move, liquidity, earnings risk, assignment risk, or probability of touch. Always confirm with the option chain
Script open-source
Dans l'esprit TradingView, le créateur de ce script l'a rendu open source afin que les traders puissent examiner et vérifier ses fonctionnalités. Bravo à l'auteur! Bien que vous puissiez l'utiliser gratuitement, n'oubliez pas que la republication du code est soumise à nos Règles.
Difficult Takes a day, Impossible Takes a Week!
Clause de non-responsabilité
Les informations et publications ne sont pas destinées à être, et ne constituent pas, des conseils ou recommandations financiers, d'investissement, de trading ou autres fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.
Script open-source
Dans l'esprit TradingView, le créateur de ce script l'a rendu open source afin que les traders puissent examiner et vérifier ses fonctionnalités. Bravo à l'auteur! Bien que vous puissiez l'utiliser gratuitement, n'oubliez pas que la republication du code est soumise à nos Règles.
Difficult Takes a day, Impossible Takes a Week!
Clause de non-responsabilité
Les informations et publications ne sont pas destinées à être, et ne constituent pas, des conseils ou recommandations financiers, d'investissement, de trading ou autres fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.