Bull Call Spread

[moolah]

Assume i put in the 2 following Bull Call Spread, what is my net profit if my maximum profit is realized and how is it calculated

A.

Max Profit = 547
Cost of trade = 454

B.
Max Profit = 890
Cost of Trade = 611

 

[Bum]

Bull Call Spread: (Long 50/Short 60)
50 Call = $5 ($500)
60 Call = $2 ($200)
Cost of Trade = $3 ($300)
Max Profit = $7 ($700)
Max Profit = 60-50=10 minus cost of trade (3) = 7

***In your examples, "net profit" = "max profit", depending upon your definition of "max profit".

 

[moolah]

'max profit' is extracted from Thinkorswim dialog window.

 

[Bum]

'max profit' is extracted from Thinkorswim dialog window.

I don't use Thinkorswim but "max profit" = "net profit".
They get "max profit" the same as example I used above.
Post the trade you used to get your example if you want an explanation.

 

[moolah]

I believe its $547 - $453 = $94

 

[Bum]

View attachment 217391

I believe its $547 - $453 = $94

Call Spread = 165/175
Max Profit = 175-165 = 10 minus cost (4.53) = 5.47 ($547)

In your picture, price of 165 = 7
Your showing cost of 180 but cost of 175 must be 2.47
Cost of trade = 7 minus 2.47 = 4.53 ($453)

Spread = 10 (175-165)
Cost = 4.53 (7-2.47)
Max Profit = 5.47 (10-4.53)

 

[guru]

View attachment 217391

I believe its $547 - $453 = $94

The distance between your option strikes is $10, so it’s a $10 spread that can be worth $1000 max. ($10/share x 100 shares)

While whatever price you pay ($547) is the current cost/value of that spread.

$547 + $453 = $1000
So you have potential to make $453 profit and almost double your bet/investment.

“Max profit” meanz actual profit, not “Max value”.

 

[guru]

Call Spread = 165/175
Max Profit = 175-165 = 10 minus cost (4.53) = 5.47 ($547)

In your picture, price of 165 = 7
Your showing cost of 180 but cost of 175 must be 2.47
Cost of trade = 7 minus 2.47 = 4.53 ($453)

Spread = 10 (175-165)
Cost = 4.53 (7-2.47)
Max Profit = 5.47 (10-4.53)

His screenshot seems to show 2 different spreads, but the one he’s trying to buy seems to be $165/$175 call spread.