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If gold for August delivery is bid $1601.20 asking $1601.30, and gold for October delivery is bid $1603.20 asking $1603.30, then the calendar spread would be bid -$2.10 asking -$1.90 for August–October. Calendar spreads or switches are most often used in the futures markets to 'roll over' a position for delivery from one month into another month.
Calendar spread - the purchase of an option in one month and the simultaneous sale of an option at the same strike price (and underlying) in an earlier month, for a debit. [5] Jelly roll - a combination of two calendar spreads, used to profit from changes in interest rates or dividends.
The naked put profit/loss profile is similar to the covered call (see above) profit/loss profile. The naked put generally requires less in brokerage fees and commissions than the covered call. The following return calculation assumes the sold put option is out-of-the-money and the price of the stock at expiration is greater than the put strike ...
The volatility of the spread is typically much lower than the volatility of the individual legs, since a change in the market fundamentals of a commodity will tend to affect both legs similarly. The margin requirement for a futures spread trade is therefore usually less than the sum of the margin requirements for the two individual futures ...
How to know when to sell a stock for a profit — or a loss. Brian Baker, CFA. April 19, 2024 at 11:17 AM. ... Don’t sell just because you’re sitting on a profit. 2. The stock has gone down.
A long iron butterfly will attain maximum losses when the stock price falls at or below the lower strike price of the put or rises above or equal to the higher strike of the call purchased. The difference in strike price between the calls or puts subtracted by the premium received when entering the trade is the maximum loss accepted.
The last day to realize a loss for the current calendar year is the final trading day of the year. That day might be December 31, but it may be earlier, depending on the calendar.
Because of this, active traders in particular may want to pay attention to the bid-ask spread. For example, if a stock price has a bid price of $100 and an ask price of $100.05, the bid-ask spread ...