Bull Put Vertical Options Spread Question from Iraq?

Answers:1   |   LastUpdateAt:2012-09-10 16:35:03  

Question
Shelley
Asked at 2012-08-25 05:28:03
Ok , so I've been trying to educate myself on the vertical margins in my free time here in Iraq . And there are a couple of things I can not get my head around . MedlinePlus I'll use as an example AAPL : MedlinePlus currently trading at $ 99, so you sell a put at $ 95 and buy a put option at $ 90 . And while the underlying stays above 95 , a lot of money for me . MedlinePlus but what I'm not understanding is the potential loss . I have to buy the $ 90 put to limit the loss , but I do not understand how it works. for example, if AAPL goes to $ 93, and my buyer makes selling $ 95, $ 90 from my post is not in the money, do not I have to pay for the shares in the same manner as if naked ? MedlinePlus Moreover, if AAPL is below $ 90, exactly how I can use this to limit my loss ? I can practice how to sell AAPL to $ 90 if AAPL never had to begin with? MedlinePlus MedlinePlus Thanks for the help MedlinePlus Semper Fidelis
Answer1mhkjuvhygAnswered at 2012-09-10 16:35:03
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