- Bull Put Credit Spreads are designed to profit if the price of underlying does not move significantly lower.
- Risk per share is limited to the strike price of the long option minus the strike price of the short option minus the received credit.
- Maximum profit is the received credit.
- Typically return on risk is high and the probability of profit is high, but the probability of losing the entire amount risked is much higher than most other investments.
- Example: A $26 Put is sold and a $24 Put is purchased on a $28.50 stock. The options expire in 45 days and a credit of $0.25 is received. If the stock finished above $26, your 45 day return on risk is 14% (113% annualized), and the probability of making a profit is 85%, but a 16% decrease in the price of the underlying results in the loss of 100% of the amount risked (which in this case is $1.75/shr).
- Credit spread investors are tempted to take a much larger position with a spread than with a stock investment, so absolute dollars lost could be large. If the above spread if entered for 100 contracts, the investor's maximum profit is $2500, but 16% decrease in underlying stock price would result in a $17,500 loss. To put this in context, you would have to have had a 3800 share stock position to lose the same amount of money with a 16% drop in stock price.
- If the purchased option matures In-the-Money, the investor's action is required to exercise it.
- If this type of spread is successful, only the opening brokerage fees are paid. If it fails then the investor must pay brokerage fees on opening and closing transactions.
- This spread is popular when the long-term prospects of the underlying are
bullish, but the underlying's stock is overpriced and the investor does not
want to reserve the cash needed to purchase the stock "on a dip".
Bull Call Debit Spreads can also be used to take advantage of this situation,
but Bull Put Credit Spreads will likely be a better value when market sentiment
is Bearish. Bull Put Credit Spreads also have the advantages of collecting
interest on the risked funds during the term of the option and being less likely
to be disturbed by an early assignment of the short option.

Look for spreads that have credits substantially higher than your "per share" brokerage fee, high return on risk, and positive "expected values". - This analysis facilitates investor decision making by computing maximum profit, amount risked, annualized gross return, breakeven price, breakeven probability, and expected value.

- Bear Put Debit Spreads are designed to profit if the price of underlying does not move significantly higher.
- Risk per share is limited to the debit paid for the spread.
- Maximum profit is the long_put_strike_price minus the short_put_strike_price minus the cost of the spread (debit). This profit is achieved if both options mature "In the Money".
- Typically return on risk is high and the probability of profit is high, but the probability of losing the entire amount risked is much higher than most other investments.
- Example: A $115 Put is sold and a $120 Put is purchased on a $108 stock. The options expire in 25 days and a debit of $4.20 is paid. If the stock finished below $115, your 25 day return on risk is 19%, and the probability of making a profit is 81%, but a 11% increase in the price of the underlying results in the loss of 100% of the amount risked (which in this case is $4.20/shr).
- If the purchased option matures In-the-Money, the investor's action is required to exercise it.
- If this type of spread is successful, brokerage fees must be paid both opening and closing transactions. If it fails, then the investor pays only opening brokerage fees.
- This spread is popular when the prospects of the underlying are bearish,
but the investor won't accept the risk of a short stock position.

Look for spreads that have "Maximum Profit" substantially higher than your "per share" brokerage fee, high return on risk, and positive "expected values". - This analysis facilitates investor decision making by computing maximum profit, amount risked, annualized gross return, breakeven price, breakeven probability, and expected value.

- Bull Call Debit Spreads are designed to profit if the price of underlying does not move significantly lower.
- Risk per share is limited to the debit paid for the spread.
- Maximum profit is the short_call_strike_price minus the long_call_strike_price minus the cost of the spread (debit). This profit is achieved if both options mature "In the Money".
- Typically return on risk is high and the probability of profit is high, but the probability of losing the entire amount risked is much higher than most other investments.
- Example: A $50 Call is sold and a $45 Call is purchased on a $54 stock. The options expire in 25 days and a debit of $4.60 is paid. If the stock finished above $50, your 25 day return on risk is 8.7%, and the probability of making a profit is 88%, but a 17% decrease in the price of the underlying results in the loss of 100% of the amount risked (which in this case is $4.60/shr).
- If the purchased option matures In-the-Money, the investor's action is required to exercise it.
- If this type of spread is successful, brokerage fees must be paid both opening and closing transactions. If it fails, then the investor pays only opening brokerage fees.
- This spread is popular when the long-term prospects of the underlying are
bullish, but the underlying's stock is overpriced and the investor does not
want to reserve the cash needed to purchase the stock "on a dip".
Bull Put Credit Spreads can also be used to take advantage of this situation,
but Bull Call Debit Spreads will likely be a better value when market sentiment
is Bullish.

Look for spreads that have "Maximum Profits" substantially higher than your "per share" brokerage fee, high return on risk, and positive "expected values". - A Call Spread is more likely to be disturbed by early assignment of the short option than a Put Spread for dividend paying stocks, because exercise just before an ex-dividend date may be more optimum than waiting until the option matures.
- This analysis facilitates investor decision making by computing maximum profit, amount risked, annualized gross return, breakeven price, breakeven probability, and expected value.

- Bear Call Credit Spreads are designed to profit if the price of underlying does not move significantly higher.
- Risk per share is limited to the strike price of the long option minus the strike price of the short option minus the received credit.
- Maximum profit is the received credit.
- Example: A $30 Call is sold and a $35 Call is purchased on a $28.50 stock. The options expire in 25 days and a credit of $0.50 is received. If the stock finished below $30, your 25 day return on risk is 11%, and the probability of making a profit is 82%, but a 23% increase in the price of the underlying results in the loss of 100% of the amount risked (which in this case is $4.50/shr).
- If the purchased option matures In-the-Money, the investor's action is required to exercise it.
- If this type of spread is successful, only the opening brokerage fees are paid. If it fails then the investor must pay brokerage fees on opening and closing transactions.
- This spread is popular when the prospects of the underlying are bearish,
but the investor is not willing to accept the risk of a short stock position.
Bear Put Debit Spreads can also be used to take advantage of this situation,
but Bear Call Credit Spreads will likely be a better value when market sentiment
is Bullish.

Look for spreads that have "Maximum Profits" substantially higher than your "per share" brokerage fee, high return on risk, and positive "expected values". - A Call Spread is more likely to be disturbed by early assignment of the short option than a Put Spread for dividend paying stocks, because exercise just before an ex-dividend date may be more optimum than waiting until the option matures.

- Required multi-legged trades are executed efficiently.
- If options are assigned, they are assigned immediately before expiration.
- The market data delay does not invalidate the analysis.
- One option contract covers 100 shares of underlying security.
- The option strike price compares directly to the underlying's price. (Converted options, due to events such as mergers, sometimes compare with a multiplier.)
- Dividends are treated as continuously paid out.

- Historical data is retrieved on the underlying security and historical volatility is calculated.
- The option chain for the underlying is retrieved and the options in the chain are screened by their volume and their "safety margin".
- Options, which pass the screening criteria, are combined into spreads and analyzed.
- Analysis results are compared against filtering criteria.
- Results, which pass filtering criteria, are displayed.

This parameter specifies a series of safety margins separated by commas.

Example: `5,9,20`

Safety margin 1 is 5%

Safety margin 2 is 9%

Safety margin 3 is 20%

The safety margin is the amount the price of the underlying stock may change in the unfavorable direction before the spread no longer pays off at maximum profit.

Each safety margin is applied to successive expiration periods. That is, safety margin 1 is used to screen the spreads with the nearest expiration date, safety margin 2 is used to screen the next nearest spread expiration date, etc.

Checking the box for this parameter will activate the liquidity screen. Only options that have a previous day's volume greater than the specified amount will pass the screen.

Up to ten underlying stock or index ticker symbols may be entered
for analysis. Use commas to separate ticker symbols. This field is not case
sensitive.

Example: `IBM,csco,qqq,LU`

The annualized expected rate of investment growth. Because of the uncertainty involved in choosing this number, the analysis programs allow you to specify a range for it. The minimum value of the range is used for calculations that would show profit most strongly under bullish conditions. The maximum value of the range is used for calculations that would show profit most strongly under bearish conditions. This introduces a degree of conservatism (worst case analysis) into the result.

This field is used to calculate brokerage fees on spread's net profitability and expected value. Brokerage fees often have a significant impact on spread profitability. (See Brokerage Fee Calculation)

Checking the box for this parameter will activate the gross return on risk filter.

Checking the box for this parameter will activate the net return on risk filter. The net return is defined as the expected value divided by the amount risked.

The first column displays the underlying's symbol.

The "Last" column displays the underlying's last trade price.

The "Buy@Ask" column displays the option symbol (without .o suffix),
strike price, and current Ask price of the long option of the spread. Example: `INQJG(35)@0.05`

means option INQJG.o has a strike price of $35 and has a current Ask price
of $0.05.

The "Sell@Bid" column displays the option symbol (without .o suffix),
strike price, and current Bid price of the short option of the spread. Example: `INQJF(30)@0.55`

means option INQJF.o has a strike price of $30 and has a current Bid price
of $0.55.

The "Days" column displays the number of days remaining until spread option expiration.

The "Buy/Sell Volume" column displays the most recent session's
volumes for the specified long and short options.

Example: `2,897/6,106`

The long option's volume was 2,897 contracts.

The short option's volume was 6,106 contracts.

The "Safe" column displays the spread's safety margin.

The "Break Even" column displays the spread's Break-Even price.

The "Max Profit" column displays the maximum gross per share profit achievable by the spread.

The "Risk$" column displays the per share amount risked (maximum gross loss achievable) by the spread.

The "Annual MaxRtn" column displays the annualized maximum gross return on risk of the spread ((MaxProfit/Risk$)/(Days/365)).

The "Prob Profit" column displays the spread's Probability of Profit. (See the "Probability of Profit" description in the site's education section.)

The "Net ExpVal" column displays the spread's per share Expected Value, including the impact of brokerage fees. (See the "Expected Value" description in the site's education section.)

The "Annual NetRtn" column displays the spread's expected annualized return, including the impact of brokerage fees. This value is the annualized expected value divided by the amount risked.

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