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I trade call spreads among several other option strategies. Is there something specific you're looking to discuss related to call spreads,...or just spreads in general?
Trading: Equities, index options and futures/futures options
Posts: 190 since Apr 2010
Thanks Given: 66
Thanks Received: 198
Vertical spreads are a great topic to study. Not only are they a great stand alone strategy but they are also the building blocks of many other more complicated structures like iron condors and the various types of butterflies.
On the topic of vertical call spreads. Im learning about them now myself.
I would just like to check if my calculations are right here-
When I compare it to TD Ameritrade it differs slightly.
Today AAPL is @ 230
When I open a Vertical spread on TOS I go
- Call1: long Call @ 230 (prem: $19.6) and
- Call2: short call @ 235 (prem: $17)
Its on a 30 day option (weekly) set to expire on 24 Apr (32 days from today)
So here are my calcs
If the market goes to 220: (as both expire)
lose -$1960 premium, gain $1700 -> net = -$260
If the market goes to 233: (as call1 exercised, call2 expire)
lose -$1960 premium, gain $300, gain $1700 -> net = +$40
If the market goes to 240: (as both exercised)
lose -$1960 premium, gain $1700, gain $1000 on call1, lose -$500 on call2 -> net = $240
Therefore my max profit is $240 and max loss is $-260
