FPS Bull Put Credit Spread — 2026-10-16

FPS (Forgent Power Solutions, Inc. Class A Common Stock) shows bullish unusual options activity: $0K of buyer-initiated unusual call flow (0% call-dominant) detected across near-term expirations, with a peak vol/OI ratio of 1.9x on the 37.5 call. We fade this by SELLING premium on the other side: the trade profits from time decay as long as FPS stays above $37.5 through expiration. IV rank is -11 (low) — rather than sell naked premium at this IV, this is defined as a bull put credit spread (short $37.5 / long $35) so max loss is capped. Sell the $37.5 / buy the $35 put bull put credit spread expiring 2026-10-16 (28 DTE) for a net credit of $0.83 ($83 per spread). Breakeven at $36.67; net delta 0.13.

Underlying: FPS @ ~$39.51 | 2026-10-16 (28 DTE) | Net credit (entry): ~$83 per spread. Use limit orders at the mid or slightly better.

ENTRY: Sell the $37.5 / buy the $35 put credit spread expiring 2026-10-16 (28 DTE) as ONE order at a LIMIT of the mid or better — target credit $83 on a $2.5 -wide spread. IV rank -11 is low — premium is thin, so keep size small and lean on a defined-risk structure. Don't leg in. Gamma: dealer gamma is roughly neutral — no pin edge either way; put wall (support) at $35; call wall (resistance) at $37.5. | TAKE PROFIT: Buy the spread back to LOCK IN gains at ~50% of the $83 max credit (close near $41 remaining). Also close on TIME: exit around 21 DTE regardless of P&L to sidestep the late-cycle gamma/pin risk near FPS's short strike(s) — currently 28 DTE, so plan the exit 7 day(s) out. Defined risk — max loss $168, so let it run to ~50% rather than scalping tiny. | IF TESTED: If FPS tests the $37.5 short put (delta ~0.30) or the loss reaches ~$165 (≈2× credit), roll the WHOLE spread DOWN and OUT ~7–14 days for a net credit — the lone-vertical play is roll-down-and-out or close (there's no untested side to roll in until you add a call spread). Treat a close below the $35 put wall as the hard trigger to act (the pin support has failed). If price knifes past the $35 long put, the spread is at/near max loss ($168) — take it rather than hoping. Breakeven $36.67. | MAXIMIZE: Winning cleanly above $37.5? Let theta close it toward 50%. To improve it, roll the spread UP toward the money in the next cycle for a fatter credit once most of this credit is banked, or add a bear call spread above the market to convert into an iron condor and double the premium if the flow turns two-sided.