A bull put spread involves writing or short selling a put option, and simultaneously purchasing another put option (on the same underlying asset) with the same expiration date but a lower strike price. A bull pu
Example of bull put spread Sell 1 XYZ 100 put at3.20 Buy 1 XYZ 95 put at(1.30) Net credit =1.90 Maximum profit Potential profit is limited to the net premium received less commissions, and this profit is realized if the stock price is at or above the strike price of the short put (...
Profit Calculation of Bull Put Spread:Maximum Return = Net Credit Following up from the above example 1: Sell to open 10 QQQQ Jan44Put for $1.85 per contract and Buy to open 10 QQQQ Jan43Put for $1.05 per contract Max. Return = $1.85 - $1.05 = $0.80 when QQQQ closes above $44 Ma...
A bull put spread consists of two put options. First, an investor buys one put option and pays the premium. Meanwhile, the investor also sells a put option with a strike price that is higher than the one they bought, receiving a premium for that sale.2Both options will have the same e...
max loss, but the Put spread will have a higher breakeven level. Ergo more upward movement in the underlying is needed. This may all sound confusing, so let’s go through a real example of a Bull Call Spread and Bull Put Spread. Both these plays were posted on the Leavitt Brothers web...
Bull-Put Credit Spreads... Bull Put Credit Spread Profit Loss Chart This bull put credit spreads strategy is to realize a profit by making cash that is a net credit formed by the difference in a SOLD PUT price and a BOUGHT PUT price. While the stock goes up, the investor keeps the ne...
In this example: 10200 + 210= 10410 Bull Put Spread As the name suggests, this strategy is also used when the outlook on the market is bullish, and it uses put options. In this, a trader shorts a put with a higher strike price and buys one put with At the Money (ATM) lower strik...
Then we will perform the same assessment on Trader #2's bull call spread. Finally, we will put these two strategies side by side and review their respective benefits and trade-offs. Long call example To start, let's assume that XYZ is trading for $173.92 and trader #1 decides to ...
Breakeven = short put strike – premium received Example A 70-75 bull put spread valued at $2 would consist of selling a 75-strike price put and buying a 70-strike price put. Here the $2 premium would represent the max win if the stock stayed above the 75-strike price. Having a $5...
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