Please recheck.
If the Call Spread (sell 50 and buy 60) expires with underlying above 60 your loss is not limited to what you collected at inception of trade. I wish it was so simple.
On Fri, Jun 11, 2010 at 10:46 AM, paul7313 <paul7313@yahoo.com > wrote:
long call; short call; long put; short put
I thought it was 2 spreads; call(short & long) and put(short and long)
using a genaric(any) stock or index. Example;
1 contract
short 50 call+ long 60 call (spread) credit 1
short 40 put+ long 30 put (spread) credit 1
when I open the position, I earn $200
options expire 64 so puts expire worthless, so I keep $100
calls in the money so I lose $100
when all is said and done; I earn $100
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