How to realize full profit from bull call spread

newwurldmn · Mar 8, 2014

drownpruf said:
wtf, the cost (0.45) is the risk charged by the mkt. This was not a case of closing ITM by a few cents over the short-strike. My God, the only thing you ppl are good at is beating a dead horse.

They are talking about 45 cents on a 400 stock that moves like 40 vol.

The stock can move by 45 cents between 3:59:58 and 3:59:59

justrading · Mar 8, 2014

newwurldmn said:
They are talking about 45 cents on a 400 stock that moves like 40 vol.

The stock can move by 45 cents between 3:59:58 and 3:59:59

Bloody hilarious. Talk about having some semblance of priorities. ROFLMAO.

FXforex · Mar 8, 2014

voltrader1 said:
So i tried to sell the 440/455 bull call spread. Both contracts in the money, but the best bid posted all day until 4pm was 4.45. Couldnt get filled at mid or above mid for hours so i ended up getting out at 4.55.

But thats still .45 I got jipped out of on a spread thats worth 5.00.

Note: "440/455 bull call spread" Should be 440/445 bull call spread.

voltrader1 ..... Another lesson here is to reconsider debit spreads. At first glance they seem like a good idea to reduce the cost of the position but that can end up costing you by capping you maximum gain, in your case $5.00 instead of $8.00.

How much did you get by selling the 445 Call, was it less than $3.00?

drownpruf · Mar 8, 2014

newwurldmn said:
They are talking about 45 cents on a 400 stock that moves like 40 vol.

The stock can move by 45 cents between 3:59:58 and 3:59:59

I thought he was referring to the discount to the expiration value of the bull vert?

voltrader1 · Mar 8, 2014

FXforex said:
Note: "440/455 bull call spread" Should be 440/445 bull call spread.

voltrader1 ..... Another lesson here is to reconsider debit spreads. At first glance they seem like a good idea to reduce the cost of the position but that can end up costing you by capping you maximum gain, in your case $5.00 instead of $8.00.

How much did you get by selling the 445 Call, was it less than $3.00?

oh wow I didnt see that typo, it was the 440/445 bull call spread.
nflx closed at 448, and was over 449 at the time i was trying to get out of the spread.

voltrader1 · Mar 8, 2014

drownpruf said:
I thought he was referring to the discount to the expiration value of the bull vert?

Atticus, can you tell me if i would have been alright if i had let the bull call expire?
or would I have been margined? No i dont have the 44.500 to buy the stock.

and FX i sold the 445 for 9.64 on wed.

newwurldmn · Mar 8, 2014

voltrader1 said:
oh wow I didnt see that typo, it was the 440/445 bull call spread.
nflx closed at 448, and was over 449 at the time i was trying to get out of the spread.

What time of day?

newwurldmn · Mar 8, 2014

drownpruf said:
I thought he was referring to the discount to the expiration value of the bull vert?

He was. A 400 stock. A 1percent callspread, 80bps ITM.

And OP did the right thing.

A disaster: getting exercised on one leg and stock down 5percent on the open on Monday.

FXforex · Mar 8, 2014

newwurldmn said:
He was. A 400 stock. A 1percent callspread, 80bps ITM.

And OP did the right thing.

A disaster: getting exercised on one leg and stock down 5percent on the open on Monday.

Wouldn't he be auto exercised for the long 440 calls and short 445 calls?

Buy 100 NFLX for $44,000.00
Sell 100 NFLX for $44,500.00
Credit $500.00 minus commissions.

newwurldmn · Mar 8, 2014

FXforex said:
Wouldn't he be auto exercised for the long 440 calls and short 445 calls?

Buy 100 NFLX for $44,000.00

Sell 100 NFLX for $44,500.00

Credit $500.00 minus commissions.

At the time he couldn't be sure of that.