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Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
2 replies on “MTM VIDEO: How to Choose the Best Vertical (Debit) Spread Strikes”
Thank you for the info!
I’m new to Options and I’m not sure if I caught your tuition.
I know that you can cash in your option early which was in my mind while listening to you. But when you mentioned buying a put to reduce the cost of the buy option it made sense till you pointed out waiting for expiration. Meaning that for the put and still selling the buy back when you reached your profit price. I thought it was going to be hard to find a buyer for the put at such an out of the money position! I’m out of work at the moment so money is tight and when placing the sell option you would have to have money to cover this trade. Would it be the cost of the stock at the put strike price times 100 to estimate the bank size required to cover it for the option to be accepted?
Hey Pat. For credit spreads, it’s the difference between the 2 premiums, times 100, times the number of contracts.