Vertical Spread Example (Credit Spread):
Sell SLVSM July 2009 $13 Put $1.20
Buy SLVSL July 2009 $12 Put $0.80
Net Premium $0.40 (-Trading Costs)
Maximum Loss $0.60 ($1 difference in strikes – $0.40 premium received) (+Trading Costs)
Maximum Gain $0.40 (-Trading Costs)
SLV is trading for $13.61 at the close on Friday 03/20/09
Advertisement
3 comments
Comments feed for this article
April 4, 2009 at 2:47 pm
tefron
Maybe your thinking about puts?
Better puts out what your smoking:o)
April 5, 2009 at 8:05 am
Steve
Thank you Jay. You are correct, I have updated the post to represent Puts.
April 4, 2009 at 2:41 pm
tefron
How do you buy the slv july 09 (12 strike price) call for .80 when it has an intinsic value of $1.61?
$13.61 at the close on Friday 03/20/09