jimmyho56 wrote: ↑Jan 11th, 2018 1:34 pmThe pricing on this based on the March 16 puts appears to be a marginal profit of $0.10. In this case, are you really making your money if the SPX goes down to 2650, but after this point, you have exposure from 2650 to 2550 as you second buy isn't until 2550?
Aren't credit spreads great when it all goes the way it should, just like when folks sell naked puts or short?free ratio spread on SPX
buy 1x Mar 2700P, sell 2x Mar 2600P and 1x 2300P - $1 CR
free broken wing butterfly
buy 1x Mar 2700P, sell 2x Mar 2650P, buy 1x Mar 2550P - $0
obviously, they are free, but not risk free. At least, if you're wrong, you don't lose anything. And assumption is that any down move will be measured and not black swan event.
when trading [buying/selling] options, especially when its only 'one-contract' (100 shares worth) there are other factors to take into account when doing it all at the same time & timing is critical.
1. the Bid & Ask price
2. the brokerage fees
3. the FX if going back & forth between $Cdn to $US
I'd be interested to see on expiry the net-net profit of this trade?
BTW, don't know where folks are getting their options quotes or seeing what the potential profit/loss could be, if they are getting them on their broker website or using different price points...bid, mid, ask?
For a quick calculator I have been using