call. At the money calls on Company X stock (strike price 50) are trading at 2 and out of the money calls on Company X stock (strike price 53) are trading.50. Remember, you can increase the profit potential of the spread by writing forex reserves the options in Leg B with a higher strike price. Bull Call Spread Payoff Diagram, limited Upside profits, maximum gain is reached for the bull call spread options strategy when the stock price move above the higher strike price of the two calls and it is equal to the difference between the strike price. Maximum profit is made when Price of Underlying Security or Strike Price of Leg.
Bull call spread binary option
Bull, call, spread, explained Online, option, trading Guide
The ideal scenario is that the price of the underlying security goes up to around the strike price of the written options contracts, because this is where the maximum profit. Similar Strategies The following strategies are similar to the bull call spread in that they are also bullish strategies that have limited profit potential and limited risk. If the price of XYZ had declined to 38 instead, both options expire worthless. What are Binary Options and How to Trade Them? The options you bought in Leg A will be in the money and worth approximately 3 each for a total of 300. The net cost of the trade is 47 (57 - 10 plus trade commissions.
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