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Post by brosin on Sept 16, 2010 14:58:17 GMT -5
That's a calendar spread I am refering to a vertical spread i.e. selling the 113 call and buying the 112 call (bull spread) and a short or bull put spread would be selling the 112 put and buying the 111 put. Lets say the premiums for the puts are .73 and .42 thus your debit would be .31 minus transaction costs. However you are limited to a max loss of .69 (spread minus debit received). you can do calendar spreads with puts and calls which would be i.e. selling sept 112 and then buying 112 call (this is considered covered as value of later month will always be greater than current month). and diagonal spreads would be selling 112 and buying 113 (margin requirements here are different). Man I have so much to learn. Thanks for starting me out - I will start looking and learning the different strategies. Right now I am just a blind man grasping at air trying to make sense of it all. Plus with my hugely bullish bias, hedged strategies are tough for me to like. I will be asking a whole lot of questions in the weeks and months ahead ;D
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