Bear Call Spread math [Options Trading Wisdom from the Art of War]

60/65 Bear Call Spread on NTAP

By selling the $60s and buying the $65s, a net credit of $1.26, or $504 total, was achieved. However, doing this spread by itself introduces the possibility of having to buy stock at 65 and delivering it at $65… times four contracts that’s a $2000 liability offsetting the $504 received. Total Amount AT RISK: $1496

About Kurt Frankenberg

Kurt Frankenberg is an author and speaker about entrepreneurship, martial arts, and trading the stock and options markets. One of several "Biznesses" he founded as a teen, The Freedom School of Martial Arts, has been in continuous operation since 1986. Kurt lives in Colorado Springs with his wife Sabrina, German Shepherd Jovi, and his ninja cat Tabi.