tag:blogger.com,1999:blog-5375291312433129989.post5591964947912143491..comments2023-06-03T05:06:58.216-04:00Comments on The Lazy Trader: Closed August $RUT Bear Call SpreadHenrikhttp://www.blogger.com/profile/05792195649092816606noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5375291312433129989.post-74590136876694703682013-08-07T22:00:05.053-04:002013-08-07T22:00:05.053-04:00Hi Len,
Well, I have never allowed that to happen...Hi Len,<br /><br />Well, I have never allowed that to happen. But yes, you should be debited if you lose these trade because RUT is a cash settled instrument. Meaning there's no stock behind it. You are never assigned stocks with RUT nor with SPX. Just one note there, it is not 1086 the price at which you lose money, it is actually when the short strike is penetrated in this case 1080. But because I had an initial credit of 0.70 the actual breakeven is 1080.70. From there onwards the position loses money at expiration (to a maximum of 4.30 ($430) per contract)<br /><br />Hope that helps.The Lazy Traderhttps://www.blogger.com/profile/08598866019359750526noreply@blogger.comtag:blogger.com,1999:blog-5375291312433129989.post-81696721791977608202013-08-07T10:49:59.220-04:002013-08-07T10:49:59.220-04:00Thank you LT. I'm following your trades (paper...Thank you LT. I'm following your trades (paper & learning) and I have a question. If you don't cover and RUT expires @ 1086 would your broker automatically debit $100 per contract from your account?Anonymousnoreply@blogger.com