Comments on: Options Spread Trading Explained: How to Add Options Trading to Any Investment Arsenal

By: LEAP Option Spreads: Tame the Market With This Risk-Blasting StrategyTheSmartCapAlert | TheSmartCapAlert

Tue, 22 Jun 2010 16:04:01 +0000

[...] Here’s the step-by-step process for a LEAP spread trade… [...]

By: Brad Hessel

Brad Hessel — Wed, 14 Apr 2010 13:13:17 +0000

Karim,

Good article! Please consider supplementing it by spelling out the mechanics of what happens when the calls expire with the price of GG:

[1] north of $60
[2] between $40 and $60
[3] south of $40

It would be good if you covered what happens by default (if you give no instructions to your broker) and other reasonable choices you might make in each scenario. (Not that there would be many choices in scenario [3].)

E.g., in scenario [1] a reasonable question might be: “On the day the options expire, will my broker (presuming I don’t instruct him differently) sell my $40 call and buy back my $60 call (which would net me a profit) or actually exercise the $40 call in order to have shares to sell at $60 when the call I sold is exercised? If the latter, do I need to have $4000 cash in my account to cover the intraday purchase of the shares?”

By: MICHAEL JACOB

MICHAEL JACOB — Wed, 03 Mar 2010 17:29:56 +0000

Hi rahim,
some how i understood your message, was good and would like to know the ideas in currency trading for this do you publish any books or any other. Actually i trade on currency market in india, but i am not able to dedect the price action and make profits. I trade at MCX-SX.
Please let me know some ideas.

Reagards,
J.Michael Jacob.

By: Investment U

Investment U — Mon, 01 Mar 2010 14:12:13 +0000

Hemraj,

To close out a bull spread before expiration, you must sell your lower priced call option that you bought and buy back the higher priced call option that you sold.

Good investing,

Investment U

By: Hemraj

Hemraj — Fri, 26 Feb 2010 09:50:00 +0000

Hi
Karim mentions that in a bull spread he closed the trades well before the expiry date. How do you actually close the write call option? Do you buy that call option back? How does this process work in the exchange?

Regards

By: Donald Roberson

Donald Roberson — Mon, 26 Oct 2009 09:34:41 +0000

Will a change in volatility affect the risk and return ratio?

By: Navin Tyagi

Navin Tyagi — Fri, 16 Oct 2009 01:35:40 +0000

Great article. Explained in a very simple and clear way with given examples. Thanks.

By: Dana

Dana — Thu, 15 Oct 2009 18:00:32 +0000

Fabulous article. Thank you, well written and simplified for the novice.

By: Options Spread Trading Explained: How to Make Triple-Digit Gains From Double-Digit Opportunities | INVESTMENT NEWS&IDEAS

Thu, 15 Oct 2009 15:30:40 +0000

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