any option sellers

"You spend a lot of time on volatility forecasting. You should spend some time on understanding basic options concepts and put-call parity.

A debit spread is equivalent to a credit spread. A call credit spread is a put debit spread. "

the above is what you call condescending?

no wonder far East nations' education systems are outpacing the US and the russians treat obama like a kid.
gfy in your response to him shows a lack of self control and discipline. people with short fuses are rarely successful traders.
 
lets see, was my question answered? no.. is it assumed that i dont know the above? yes.

all i was asking was for a step by step on how to exit a profitable vertical call debit spread. my current understanding is that you need to exercise the long and get assigned the short at expiration only. if you close the position before expiration its possible to still havr a losing /breakeven spread even if the underlying is above your short call.

based on what im readinf, the strike prices are used ti calculate expected profits, however without exercising or assigning of either, the strikes dont come into play for profits. rather, you just have two positions where you need to buy one back and sell one.

so again, if someone could answer my question, that would be great.
 
my question is, how can you profit on a vertical call spread without having to exercise your options at expiration?

For example,

I have a BBRY trade on right now
Long 4x 9 Call @$1.81 mar 28
Short4x 10 call @1.10 mar 28.

Currently BBRY is trading at 10.35, which is above the short strike, yet my position shows I'm at a net loss of around $20-30 or so.
my commissions are only $1, so that makes no sense to me.


and my position isn't in the green.
 
You will not realise the full value of a call vertical debit spread until expiration. You can close the position for a profit, but it will not be the intrinsic value of the spread with both legs ITM.

If you want to know why, then the advice is study the Greeks.

You got upset because you did not get the answer you wanted to hear.

From where I'm standing, I saw someone who cared enough about your welfare to give you the answer you NEEDED to hear.

And for that you tell him gfy?
 
justrading said:
You will not realise the full value of a call vertical debit spread until expiration. You can close the position for a profit, but it will not be the intrinsic value of the spread with both legs ITM.

If you want to know why, then the advice is study the Greeks.

You got upset because you did not get the answer you wanted to hear.

From where I'm standing, I saw someone who cared enough about your welfare to give you the answer you NEEDED to hear.

And for that you tell him gfy?
More...

no, I got annoyed that the answer I got was one that was assuming rather than helpful.

Caring for someone's well being is to direct them in a way thats in line with what they are asking. Sure EVERYTHING can be arguably related, but put call parity doesn't answer my question of whether you have to exercise your long position and get assigned to profit on a vertical call debit spread. Put call parity just means that they are equal and opposite.

At least you gave me an answer that answers my question and directs me in the direction of what to learn. You can't learn something if you don't know what you don't know.

Like in the above example, if you asked someone for directions, would you appreciate it if they gave you answer that, not only not tell you where to go, but suggested you learn more about the city? probably not. maybe you should try that when you're asked for directions and see how they react to you.

Back on topic,

I get what some of the greeks mean, I understand the underlying concepts that they affect the rate of change in growth/decline, amount the options move, and etc etc. granted, I don't know everything, and will continue reading, but if the case is that vertical debit spreads don't have their values realized until expiration, isn't it better to do credit spreads instead? at least that way you are at a net positive and can close out a position early to capitalize on at least half of your max profit.
 
crayon851 said:
my question is, how can you profit on a vertical call spread without having to exercise your options at expiration?

For example,

I have a BBRY trade on right now
Long 4x 9 Call @$1.81 mar 28
Short4x 10 call @1.10 mar 28.

Currently BBRY is trading at 10.35, which is above the short strike, yet my position shows I'm at a net loss of around $20-30 or so.
my commissions are only $1, so that makes no sense to me.


and my position isn't in the green.
More...
Here's a very simple question for you to ask yourself, while avoiding all the option blah-blah...

Imagine you're not already long this call spread and, instead, someone offers it to you today. Given that you know that the most you could ever make on it is $1 in one month's time, during which BBRY can go anywhere, how much would you pay for the call spread?

This should hopefully answer your question of "how you can profit"... The answer is that there's ever only a couple of ways that you make money. One is mark-to-market PNL, while the other one is the "realized" PNL. The mark-to-mkt PNL is the expectation of realized PNL.
 
crayon851 said:
no, I got annoyed that the answer I got was one that was assuming rather than helpful.

Caring for someone's well being is to direct them in a way thats in line with what they are asking. Sure EVERYTHING can be arguably related, but put call parity doesn't answer my question of whether you have to exercise your long position and get assigned to profit on a vertical call debit spread. Put call parity just means that they are equal and opposite.

At least you gave me an answer that answers my question and directs me in the direction of what to learn. You can't learn something if you don't know what you don't know.

Like in the above example, if you asked someone for directions, would you appreciate it if they gave you answer that, not only not tell you where to go, but suggested you learn more about the city? probably not. maybe you should try that when you're asked for directions and see how they react to you.

Back on topic,

I get what some of the greeks mean, I understand the underlying concepts that they affect the rate of change in growth/decline, amount the options move, and etc etc. granted, I don't know everything, and will continue reading, but if the case is that vertical debit spreads don't have their values realized until expiration, isn't it better to do credit spreads instead? at least that way you are at a net positive and can close out a position early to capitalize on at least half of your max profit.
More...

The irony is that the answer to your question of debit vs. credit is the put call parity.
 
Martinghoul said:
Here's a very simple question for you to ask yourself, while avoiding all the option blah-blah...

Imagine you're not already long this call spread and, instead, someone offers it to you today. Given that you know that the most you could ever make on it is $1 in one month's time, during which BBRY can go anywhere, how much would you pay for the call spread?

This should hopefully answer your question of "how you can profit"... The answer is that there's ever only a couple of ways that you make money. One is mark-to-market PNL, while the other one is the "realized" PNL. The mark-to-mkt PNL is the expectation of realized PNL.
More...

personally, I'd pay $1 and below. Risk 1 to make 1 right?
 
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