I'm not even sure if that's the preferred term to call them... Anyways Do you like buying the long Call ITM and selling the short Call OTM, or? The reason I ask is that I've been doing more and more of these lately. I've found that I prefer the long, if not both to be ITM. There was a guy on the tube this morning who bought the Micron DEC 110 Call and wrote the 125 Call. Both are well OTM. I realize that if they're both ITM it's more conservative and less profit potential. Then if the long is ITM it's less conservative with more profit potential and so on. But he is way OTM. That's a flyer, no?
You realize buying ITM Call verts is the equivalent to selling the OTM put spread.. Yes,the MU spread is a bit of a flyer.. What makes you choose the strikes on your spread?? Greeks,skew,Guestimates??
Yes, you end up ahead $0.30 if MU remains above $92 at expiration. But that is no guarantee. MU reports earnings after market close today.
Arnie,you really should read a basic book on options A I mentioned you are selling cheap put spreads,in this case the 92/91 for .30 Max profit=.30,Risk is .70 If you are soley looking at annualised returns,its not bad assuming the stock stays above 92
I don't have the patience for those books. Sorry for being Capt Obvious, But there's no need to wait for expiration, Closing the position can be done at any time.
You yourself stated that you are ahead $0.30. This statement is not currently accurate, and will only become true if (1) you hold until expiration and (2) the stock is above $92 at expiration. So yes, there is no need to wait for expiration, but unless you do, you won't end up ahead $0.30.