Current price of CHK is $4.52. Sell $7 call and collect a premium $0.02 ($2 per contract) Buy $6.5 call and pay a cost $0.01 ($1 per contract) Let's Ignore trading commissions for now. Regardless of price change the outcome of this trade is always positive i.e., there is no risk. What am I missing here?! Assume $ 0.75 commissions per contract, and $0.0 base fee . That would be $1.5 total commission for establishing this trade. In this case the maximum loss is -$0.5 per contract if price declined or remained unchanged and maximum profit is much higher +$49.5 per contract if the stock rallied.
They obvious question would be.... "how is it possible to have a bid of 2 cents and an ask price of 1 cent?" The answer will be.... "it isn't...." You pricing sheet (OP's not RM's) shows bids of 1 cent as wel as offers of 1 cent... so it seems this is just incorrect data....... Also, if you hypothetically could trade this (to be honest... it sometimes does happen that a higher call can be sold at a higher value than a lower strike call), why would you settle with buying the 6.50 call and not go with buying the 5 call, since they both have an offer of 1 cent?