My first thought is never do a credit spread on a stock/etf that you do not want or can not afford to own. The good standing (balance sheet/management) along with volitility are very important. When a good stock drops one or two standard deviations due to outside market issues, it is an opportunity. Outside of that, there are many instances when you will not be able to react in time to get out without assignment. If your broker cooperates, you may be able to sell your credit leg and the assigned stock quickly avoiding the long stock position. You will still be out the difference on the credit spread, possible underlying price change and fees. On the other hand, if you can own the stock based on the above, take it and sell a covered call that covers your loses and even some profit. That is the only way I know to rescue a credit spread gone bad, of course it is not a sure thing. There may be others, I would not mind learning about them.
