If you like the risk/reward of the Debit Spread strategy but are bearish:Bear Put Debit Spreads Help If you are Bullish on the stock but prefer credit spreads:Bull Put Credit Spreads Help For more information on the Parity Strategy to Bull Call Debit spreads:Parity Trading - Option Spreadsan...
Long Call Ladder Spread - ClassificationType of Strategy : Bullish | Type of Spread : Vertical Spread | Debit or Credit : Debit The Long Call Ladder Spread is part of the "Ladder Spreads" family. Ladder Spreads add an additional further out of the money option on top of two legged ...
the trader collects the premium upfront, hoping to keep the profits when the options expire, unlike in a bull call spread, where the trader pays a premium hoping to profit when the options expire. Both strategies are moderately bullish, the only major...
As the name of the strategy suggests, a bear call spread is used when someone is bearish on the underlying asset. Bear call spreads are often used when an investor believes that the underlying asset will undergo a moderate decline in price but wants to limit any potential loss. It's a re...
(limited to net debit paid) Break Even Point of Calendar Call Spread: The breakeven point of a Calendar Call Spread is the point below which the position will start to lose money if the underlying stock rises or falls strongly and can only be calculated using theBlack-Scholes model. ...
A diagonal spread is an option spread that has both different strike prices (like call and put credit and debit spreads) and expiration dates (like Calendar Spreads). Generally, the option leg that is purchased or long has a later expiration date than the sold or short option. Diagonal ...
It is the most fundamental call spread strategy. In this, the short and long calls have varying strike prices but the same expiry. We can further classify this spread intobullish or bearish: Bull Vertical Call Spread– a trader uses this strategy when they expect the rate of the underlying ...
This bear call spreads strategy is a bearish strategy as you expect the stock to remain below the short (sold) strike price. An investor wants both options to expire worthless so they will retain the entire net credit. The maximum risk in a bear call spread is the difference between the ...
Net Debit - the cost to enter this covered call, or the Break Even point for the call on expiration date. Net Debit (Break Even) is calculated as (Stock Price - Bid). If the stock price is HIGHER than the call's Net Debit on expiration, the call will make a profit....
Advantages Of Horizontal Call Time Spread::: Able to profit even if underlying asset stays stagnant. :: Can be rolled forward for as many months as the expiration month of the long term call options. :: Losses are limited to the net debit. :...