They are talking about 45 cents on a 400 stock that moves like 40 vol. The stock can move by 45 cents between 3:59:58 and 3:59:59
Note: "440/455 bull call spread" Should be 440/445 bull call spread. voltrader1 ..... Another lesson here is to reconsider debit spreads. At first glance they seem like a good idea to reduce the cost of the position but that can end up costing you by capping you maximum gain, in your case $5.00 instead of $8.00. How much did you get by selling the 445 Call, was it less than $3.00?
oh wow I didnt see that typo, it was the 440/445 bull call spread. nflx closed at 448, and was over 449 at the time i was trying to get out of the spread.
Atticus, can you tell me if i would have been alright if i had let the bull call expire? or would I have been margined? No i dont have the 44.500 to buy the stock. and FX i sold the 445 for 9.64 on wed.
He was. A 400 stock. A 1percent callspread, 80bps ITM. And OP did the right thing. A disaster: getting exercised on one leg and stock down 5percent on the open on Monday.
Wouldn't he be auto exercised for the long 440 calls and short 445 calls? Buy 100 NFLX for $44,000.00 Sell 100 NFLX for $44,500.00 Credit $500.00 minus commissions.