A put spread, or vertical spread, can be used in a volitile market to leverage anticipated stock movement, while also providing limited risk. Purchasing a put with a higher strike price than the written put provides a bearish strategy. This is done on only ONE option contract, how many contacts? or Risk/Reward.
Underlying stock symbol:
ALGN
Current price: $318.54
Short Put: Write (Sell)
1st June $320.00 Call
Price per option: $4.10
Contracts: 1 x 100
Total cost: $410
Long Put: Buy
1st June $322.50 Call
Price per option: $3.18
Contracts: 1 x 100
Total cost: 318
Spread: Net debit/credit: $0.92 (net credit)
Entry cost: $92 (next credit)- back into your account
Maximum risk: $158 at a price of $322.50 at expiry
Maximum return: $92 at a price of $320 at expiry
Breakevens at expirty: $320.90
Underlying stock symbol:
ALGN
Current price: $318.54
Short Put: Write (Sell)
1st June $320.00 Call
Price per option: $4.10
Contracts: 1 x 100
Total cost: $410
Long Put: Buy
1st June $322.50 Call
Price per option: $3.18
Contracts: 1 x 100
Total cost: 318
Spread: Net debit/credit: $0.92 (net credit)
Entry cost: $92 (next credit)- back into your account
Maximum risk: $158 at a price of $322.50 at expiry
Maximum return: $92 at a price of $320 at expiry
Breakevens at expirty: $320.90
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.