Odds calculation check

[dcwriter2]

Ok, I’m selling a credit spread with five points between the calls. The premium I get is 1. Thus I am risking five to get a max of six in return if I win. So, my odds are 5 to 6, right?

 

[OptionsOptionsOptions]

Ok, I’m selling a credit spread with five points between the calls. The premium I get is 1. Thus I am risking five to get a max of six in return if I win. So, my odds are 5 to 6, right?

What is a point?

 

[taowave]

No disrespect,but you should brush up on option basics.

You sold a 5 point vertical for 1 dollar.

Think about it

Ok, I’m selling a credit spread with five points between the calls. The premium I get is 1. Thus I am risking five to get a max of six in return if I win. So, my odds are 5 to 6, right?

 

[dcwriter2]

What is a point?

Sold a 25 call bought a 30 call

sorry for the slang.

 

[OptionsOptionsOptions]

Sold a 25 call bought a 30 call

sorry for the slang.

OK ....... I always thought of it as $5 or 1 strike.

 

[dcwriter2]

Five strikes between the calls. My risk is 500.

Now what about those odds?

 

[taowave]

You sold the spread for a buck ..How much can you make???
Do the math

 

[longandshort]

You sold the spread for a buck ..How much can you make???
Do the math

 

[SunTrader]

Ok, I’m selling a credit spread with five points between the calls. The premium I get is 1. Thus I am risking five to get a max of six in return if I win. So, my odds are 5 to 6, right?

The return is what you make beyond your upfront. Not including it.

 

[newwurldmn]

I logged in just to make this post. Now you know why I logged off!