LEG1: BUY IDFC 160 CALL @1.60
LEG2: BUY IDFC 130 PUT @1
COST =2.60
Total risk=5330
Return=unlimited
Pay off table:
Saturday, 2 March 2013
Wednesday, 27 February 2013
OPTION PLAIN VANILLA V/S SPREAD STRATEGIES
A
bull call spread is a type of vertical spread. It contains two calls with the
same expiration but different strikes. The strike price of the short call is
higher than the strike of the long
call, which
means this strategy will always require an initial debit. A bear put spread is
a type of vertical spread. It consists of buying one put in hopes of profiting
from a decline in the underlying stock, and writing another put with the same
expiration, but with a lower strike price, as a way to offset some of the cost.
Advantages
of strategies......
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