5 ms·
Could you give me a concrete example? To me, it sounds like you are describing a naked short call, or a short put. It is not a spread. By definition, spreads
by radiusvector 8y ago
Could you give me a concrete example?
To me, it sounds like you are describing a naked short call, or a short put.
It is not a spread. By definition, spreads have limited risk, and limited rewards.
The four main types of spreads. Take a look at the PNL diagrams. It is limited risk.
https://www.optionseducation.org/strategies_advanced_concepts/strategies/bear_call_spread.html https://www.optionseducation.org/strategies_advanced_concept...
https://www.optionseducation.org/strategies_advanced_concepts/strategies/bear_put_spread.html https://www.optionseducation.org/strategies_advanced_concept...
https://www.optionseducation.org/strategies_advanced_concepts/strategies/bull_call_spread.html https://www.optionseducation.org/strategies_advanced_concept...
https://www.optionseducation.org/strategies_advanced_concepts/strategies/bull_put_spread.html https://www.optionseducation.org/strategies_advanced_concept...
- koolba 8y agoRead this article: http://tastytradenetwork.squarespace.com/tt/blog/options-assignment http://tastytradenetwork.squarespace.com/tt/blog/options-ass... The situation I’m describing is when the sold option expires in the money but the purchased cover does not. It won’t automatically execute and you’re left with essentially a naked short.