Cash settled at expiration, was expecting the underlying stock

[earth_imperator]

You have no basic understanding of how options work."

This is not true. I've yearslong experience in options. But I'm just new to the details of spread trading. I just was irritated, as things are a little bit different with spreads.
I already have mastered the above said problem, thanks to the little help by some friends.

 

[earth_imperator]

And one more free piece of advice to you: Don't be fooled by the easy "income earning" capability of shorting vertical spread.

Thanks, but I'm just fine with spread trading. I found my destination, so to say. This is my playground for many years to come.

They are riskier than you think. You may like the small but seemingly steady income that you are earning but when it goes wrong, the loss can take out everything that you have earned and then some. Consider yourself warned.

Sorry, I can't confirm your above concerns and reservations.
Spreads are the best and safest trading vehicles ever invented, IMO.
I've become a big fan of spreads.

So, again, thanks, but no, thanks

Where do you see any risk in such a PnL diagram? It's a perfect system, IMO. This is a screenshot from the link I gave above.
Btw. my profit from that trade was 30.90% in less than 3 weeks. That's not bad IMO

 

[TheDawn]

This is not true. I've yearslong experience in options. But I'm just new to the details of spread trading. I just was irritated, as things are a little bit different with spreads.
I already have mastered the above said problem, thanks to the little help of some friends.

So you have never shorted options but only bought options in your "yearslong" experience in options I take it? Anyway the link that I gave you should still help you. You are welcome.

 

[TheDawn]

Thanks, but I'm just fine with spread trading. I found my destination, so to say. This is my playground for many years to come.

Sorry, I can't confirm your above concerns and reservations.
Spreads are the best and safest trading vehicles ever invented, IMO.
I've become a big fan of spreads.

So, again, thanks, but no, thanks

Where do you see any risk in such a PnL diagram? It's a perfect system, IMO. This is a screenshot from the link I gave above.
Btw. my profit from that trade was 30.90% in less than 3 weeks. That's not bad IMO

View attachment 295373

Like I said, consider yourself warned especially when you cannot see any risk in vertical spreads from a PnL diagram. And I strongly suggest you learn how to read a PnL diagram after having "yearslong" experience in options. LOL

 

[earth_imperator]

So you have never shorted options but only bought options I take it?

Nope. Of course one usually starts with long options. But I also did many short-selling with options, but unfortunately it was not that successful. Now I strongly believe spreads are the final solution.

Anyway the link that I gave you should still help you. You are welcome.

No, thx, not another intro text into options, please!

 

[TheDawn]

Nope. Of course one usully starts with long options only. But I also did many short-selling with options, but unfortunately it was not that successful. Now I strongly believe spreads are the final solution.
Thx, will take a quick look if I find time...

Ok if you have shorted options before, you would know when they expire OTM, you will get the full credit and won't get assigned the shares? Spreads is no different; they are just different options combined. Anyway, don't really care. Just find everything very odd...

 

[earth_imperator]

Like I said, consider yourself warned especially when you cannot see any risk in vertical spreads from a PnL diagram. And I strongly suggest you learn how to read a PnL diagram after having "yearslong" experience in options. LOL

I had asked you to tell me/us the risk you allegedly see in the PnL diagram of a spread, any spread.
But you did not answer, instead turned it into rhetoric counter-question...
I ask again: what is the risk you see in options spread trading, especially in 2-leg vertical or calendar spreads as was used here? Just give a concrete answer, please!
And please also tell us what option strategies you prefer. Thx.

 

[TheDawn]

I had asked you to tell me/us the risk you allegedly see in the PnL diagram of a spread, any spread.
But you did not answer, instead turned it into rhetoric counter-question...
I ask again: what is the risk you see in options spread trading, especially in 2-leg vertical or calendar spreads as was used here? Just give a concrete answer, please!
And please also tell us what option strategies you prefer. Thx.

Instead of telling you the answer, I am going to give you this link to read and you will find the answer yourself. https://robinhood.com/us/en/support/articles/profit-loss-chart/ This is a webpage by Robinhood that explains what are PnL diagrams and how to use them to calculate potential risk for various options and option spreads. It actually explains PnL diagrams quite well. After reading this, you should be able to understand why I say there is risk involved for vertical spread.

 

[earth_imperator]

@TheDawn, I'm disappointed of your hollow answers to my concrete questions.
I'm giving you a last chance to answer my questions.

Here are the relevant facts regarding risks from the said Robinhood link:
"
PUT CREDIT SPREAD (other names: short put spread or short put vertical)

SETUP: Short put + long lower strike Put in the same expiration

THEORETICAL MAX LOSS: Difference between the strikes minus the credit received (50 - 45 = $5 - $3 credit received = $2 max loss)

WHAT CAN GO WRONG? A quick, and/or big move to the downside. Worst case is the stock drops below the strike prices of both options.
A rise in implied volatility could inflate the option premiums while the trade is on. The short option can suffer from the rising price. However, since there is a long option (benefitting somewhat from inflating value), the impact overall is less than if it were just a short put position.
"

So, where is the danger you are talking of, ie the risk you mean?
I'm using this spread b/c I want to cap the loss --> ie. for reducing the very risk of just the ShortPut alone.
So, your statement is illogical to see more risk in a spread than in the short leg of the spread alone.

 

[TheDawn]

@TheDawn, I'm disappointed of your hollow answers to my concrete questions.
I'm giving you a last chance to answer my questions.

I already showed you where you need to go to find the answers to your concrete questions. https://robinhood.com/us/en/support/articles/profit-loss-chart/ If you don't want to do the work, I am not going to waste my time. Suit yourself to think there is no risk to vertical spreads. I really don't care. It's your trading, your life.

Good luck!