Ethereum Credit Spread Example: Our First Profitable Options Trade

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On August 24, 2023, just two days after launching Terramatris, we closed our first profitable Ethereum options trade.

The trade generated only $5.38 in premium income, but the dollar amount was never the important part. What mattered was validating the process: identifying an opportunity, managing risk, collecting premium, and closing the trade successfully.

If you are unfamiliar with credit spreads, start with our guide: How to Generate Income With Ethereum Credit Spreads.

Why We Chose a Credit Spread

At the time, our objective was not to make a large directional bet on Ethereum. Instead, we wanted to generate income using a defined-risk options strategy.

Credit spreads are popular among options traders because they allow investors to collect option premium while limiting maximum potential losses. Unlike naked option selling, risk is capped by a protective long option.

This makes credit spreads an attractive strategy for traders who want to generate income without taking unlimited downside risk.

The Trade Setup

The position consisted of an Ethereum credit spread designed to benefit from price stability within a defined range.

Our expectation was simple:

  • Ethereum would remain within the projected range until expiration.
  • The options would expire worthless.
  • The collected premium would be retained as profit.

That is exactly what happened. The position reached expiration without threatening the short strike, allowing us to keep the entire premium.

The result was a realized profit of $5.38.

While modest, the trade demonstrated an important principle that still guides our options strategies today: small, repeatable gains can compound over time.

Why Small Profits Matter

Many new traders focus exclusively on large wins. In reality, options income strategies are often built around consistency rather than home runs.

A successful options business is not necessarily about generating extraordinary returns from a single trade. It is about repeatedly executing high-probability setups while managing risk and preserving capital.

The first profitable credit spread showed that even a small account could begin generating premium income using a structured approach.

Credit Spreads as an Income Strategy

Credit spreads remain one of the most widely used defined-risk options strategies.

Potential benefits include:

  • Defined maximum loss
  • Lower capital requirements than covered calls
  • Recurring premium income potential
  • Flexible bullish or bearish positioning
  • Reduced risk compared with naked option selling

For investors interested in generating income from options, credit spreads can serve as a useful complement to covered calls and cash-secured puts.

Learn more: How to Generate Income With Ethereum Credit Spreads

Lessons From the Trade

Looking back, the most important lesson was not the profit itself.

The trade reinforced several principles that continue to shape our approach:

  • Risk management comes first.
  • Consistency matters more than individual outcomes.
  • Small gains compound over time.
  • Defined-risk structures can help improve long-term survivability.
  • Successful options trading is a process, not a prediction.

These lessons remain relevant regardless of account size or market conditions.

From One Trade to a Long-Term Framework

This first credit spread became one of many trades that contributed to the development of the broader Terramatris options framework.

Over time, our strategies evolved to include:

  • Covered calls
  • Cash-secured puts
  • Credit spreads
  • Position rolling
  • Portfolio-level risk management

The goal has always remained the same: generate option premium while managing downside risk and preserving capital.

For a broader overview, see: How to Generate Income With Ethereum Options

Final Thoughts

The first profitable trade in Terramatris history generated just $5.38. From a financial perspective, the amount was insignificant.

From a process perspective, it was an important milestone. It demonstrated that a disciplined options strategy could generate premium income from Ethereum while maintaining clearly defined risk.

Every long-term options strategy starts somewhere. For us, it started with a single Ethereum credit spread and a profit of $5.38.

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