Credit Spread is limiting the risk of options trader
It is Combination of buy lower strike price derivative and sell higher strike price derivative with
same expiry date.
EX: 1. CREDIT CALL SPREAD
SELL 6200CE@ 132 X 50 = Rs.6600
BUY 6300CE@ 74 X 50 = - Rs.3700
NET CREDIT OF Rs.2900
2.CREDIT PUT SPREAD
SELL 6400PE@ 150 X 50 = Rs.7500
BUY 6300 PE@ 92 X 50 = Rs. 4600
NET CREDIT OF Rs.2900
It is Combination of buy lower strike price derivative and sell higher strike price derivative with
same expiry date.
EX: 1. CREDIT CALL SPREAD
SELL 6200CE@ 132 X 50 = Rs.6600
BUY 6300CE@ 74 X 50 = - Rs.3700
NET CREDIT OF Rs.2900
2.CREDIT PUT SPREAD
SELL 6400PE@ 150 X 50 = Rs.7500
BUY 6300 PE@ 92 X 50 = Rs. 4600
NET CREDIT OF Rs.2900
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ReplyDeleteThe bear call spread option trading strategy is employed when the options trader thinks that the price of the underlying asset will go down moderately in the near term.
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