Underlying asset: SPY (current price: $629)
Strategy direction: short-term bearish, time period is 1 week
Strategy type: Bear Call Spread
Operation steps:
Sell a call option with an exercise price of 635 and obtain a premium of $76
Buy a call option with an exercise price of 637 and pay a premium of $39
Net income:
Premium net income = $76 - $39 = $37 (per contract)
Maximum profit:
When SPY is less than or equal to $635 at expiration, neither leg option is exercised
Investors retain all premiums
Maximum profit = $37
Maximum loss:
The price difference between the two legs is $2
Maximum loss = 2 - Net income 0.37 = $1.63 × 100 = $163
Break-even point:
Break-even point = 635 + 0.37 = $635.37
Strategy summary:
Maximum gain: $37
Maximum loss: $163
Profit/loss ratio: approximately 1:4.4
Applicable scenario: SPY is not expected to rise above $635 before expiration
Modify on 2025-07-23 08:26
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