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  • Will You Add? - Vertical Spreads - Spread Prices

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    n marked “August 35 – 40
    call spread closing price”, you can see that with the stock at
    $35.00, the spread is worthless. As the stock
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    During the life of a vertical call spread, the spread will trade
    between its minimum and maximum values (between 0 and the
    difference between the two strikes). In the case of a vertical
    call spread, the spread will trade closer to zero when the stock
    trades closer to or lower than the lower strike price. The
    spread will trade closer to maximum value when the stock trades
    closer to or higher than the higher strike price.

    For example, let’s refer back to the August 35 – 40 call spread
    chart on a previous page. In the column marked “August 35 – 40
    call spread closing price”, you can see that with the stock at
    $35.00, the spread is worthless. As the stock
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    between the two strikes). In the case of a vertical
    call spread, the spread will trade closer to zero when the stock
    trades closer to or lower than the lower strike price. The
    spread will trade closer to maximum value when the stock trades
    closer to or higher than the higher strike price.

    For example, let’s refer back to the August 35 – 40 call spread
    chart on a previous page. In the column marked “August 35 – 40
    call spread closing price”, you can see that with the stock at
    $35.00, the spread is worthless. As the stock
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    o or lower than the lower strike price. The
    spread will trade closer to maximum value when the stock trades
    closer to or higher than the higher strike price.

    For example, let’s refer back to the August 35 – 40 call spread
    chart on a previous page. In the column marked “August 35 – 40
    call spread closing price”, you can see that with the stock at
    $35.00, the spread is worthless. As the stock
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    the higher strike price.

    For example, let’s refer back to the August 35 – 40 call spread
    chart on a previous page. In the column marked “August 35 – 40
    call spread closing price”, you can see that with the stock at
    $35.00, the spread is worthless. As the stock
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    n marked “August 35 – 40
    call spread closing price”, you can see that with the stock at
    $35.00, the spread is worthless. As the stock price climbs
    toward 40, the call closing price increases until finally it
    reach its maximum. Remember, this maximum gain occurs at
    expiration. Before that time, the spread will trade with a
    premium.

    Starting from a stock price of 37 ?, a price located directly
    between the two strikes, (using our example of the August 35 –
    40 call spread) we can see the approximate value of the spread
    is roughly $2 ? dollars. This is because the August 35 calls and
    the August 40 calls are equidistant from the current stock price

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