Market View
Mildly Bullish
Implementation:
Sell a put, and buy a lower strike cheaper put for protection
- Buy 1 OTM Put option (leg 1 - LS Small Premium)
- Sell 1 ITM Call option (Leg2 - HS Large premium)
Key trigger points:
- Spread = Difference between the strikes
- Net Credit = Premium Received – Premium Paid
- Breakeven = Higher Strike – Net Credit
- Max Profit = Net Credit (at or above HS)
- Max Loss = Spread – Net Credit (at or below LS)