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Your assumptions are correct but I don't get the part when you say 'You make $2.45'

I paid $255 to enter the trade, sold at $285

I entered a Bull Call Spread of 215/220 of Face Book. When I entered this trade on TOS, it said my max profit is $245. However, when the stock price of Face Book got to about $221.70, I closed my position but the amount of $285 was credited to my account. I thought my max profit should only...

Ok, what i meant was Purchasing a Call with the anticipation the price of a stock will go up in value upon expiry

Let's say i put in a straight bull trade, which expires in one month. However, after the trade is filled, i totally forget i have an open position. What happens upon expiry if the trade is in the money? Does the system auto-exercise for me?

Buying a put equates to short selling? Thereafter, the trader will sell a put at a lower price (compared to his buy put price) to make a profit. Is this understanding correct?

For iron condor, how wide a gap should the 2 pairs of Call and Put legs be?

I have noticed sometimes the open interest can be zero. But the open interest of the price point above and below the zero open interest price point can be in the thousands. Someone care to enlighten me?

Thanks for your reply. So when i put in this trade, the money i spent is due to the long leg and in the event the short leg expire worthless, that is where i will make money in this trade?

Would you be able to share the similarities and differences between the 2 strategies? Thank you

Hi Bum, Thanks for your reply. When you mention close 2 positions, do you mean close the 'buy a call' trade and also close the 'bull call spread'? When one enters a bull call spread trade, doesn't the system auto closes your position if your pre-determined sell price is reached? For bull...

I entered a BUY Vertical trade -- BUY +1 Vertical AMZN 100 20 Sep 19 1807.5/1820 CALL @ 6.50 LMT (To open/to close) The max profit is $600, max loss is $650, cost of trade including commission is $652. From my understanding, cost of trade is how much i have to pay to enter this trade. Max...

No one can give me a straight answer. I just want a Yes / No answer weather my understanding is correct. I also don't want links to more reading material. I would have done that myself already. Hence, the reason i seem to be repeatedly asking this question.

From what i understand, to enter a Bull call spread, one Buy a ITM call and Sell a OTM call at the same time to create a pair trade. Everything else about the 2 legs to trade remain the same -- same expiration, same financial product. For a straight call, one would buy a call and come back...

From my understanding of Implied volatility (IV), high IV means the stock price will fluctuate in a wider price range. This is compared to low IV where the stock price will fluctuate in a tighter price range. Therefore, one would think if you are a option buyer, you would favour option that...

Debit amount - From what i gather, its determined by market makers. There is no calculation one can use to estimate the debit amount? Hence, the option trader is stuck with whatever price the market makers decides on? So lets say the pair of Bull call spread expire in 60 days time, even if...

Ok, let's say i buy Call spread 1x$20C/-1x$25C, when i put in the trade, how is my debit amount (i.e. the amount of money i have to pay) calculated? Let's also say about a week later my sell strike price gets hit, what happens then?

Can you provide examples? If at same strikes for both legs in the spread, how to make money?

If one is bullish about the market, one would put in a Bull Call Spread trade. But what if one is bearish about the market, what vertical spread would one put in?

If a trader Sell a Put, the trader at the opposite end of this trade is Buying a Put?