If the stock price is below the lowest strike price at expiration, then the calls expire worthless, but both puts are in the money. There are two possible outcomes in which the maximum loss is realized. The maximum risk, therefore, is 2.20 less commissions. In the example above, the difference between the strike prices of the bull put spread (and also the bear call spread) is 5.00, and the net credit received is 2.80, not including commissions. The maximum risk is equal to the difference between the strike prices of the bull put spread (or bear call spread) less the net credit received. In this outcome, all options expire worthless and the net credit is kept as income. The maximum profit potential is equal to the net credit received less commissions, and this profit is realized if the stock price is equal to or between the strike prices of the short options at expiration. As a result, it is essential to open and close the position at “good prices.” It is also important to consider the per-contract commission rate since commissions will impact the return on investment. Given that there are four options and four strike prices, there are multiple commissions in addition to four bid-ask spreads when opening the position and again when closing it. This is an advanced strategy because the profit potential is small in dollar terms and because “costs” are high. The maximum risk is realized if the stock price is above the highest strike price or below the lowest strike price at expiration. The maximum risk is the difference between the prices of the bull put spread (or the bear call spread) less the net credit received. The maximum profit is realized if the stock price is equal to or between the strike prices of the short options on the expiration date. For example, an 85-90 Bull Put Spread might be combined with a 105-110 Bear Call Spread to create a short iron condor in which the distance between the strike prices of the short options is 15 points while the distance between the strike prices of the bull and bear spreads are 5 points.Ī short iron condor spread is established for a net credit, and both the potential profit and maximum risk are limited. However, it is normal for the distance between the short call and short put to be greater than the distance between the long and short options of the same type. In the example above, one 95 Put is purchased, one 100 put is sold, one 105 Call is sold and one 110 Call is purchased, so the four strike prices are equidistant. All options have the same expiration date. GameSense is a registered trademark of British Columbia Lottery Corporation, used under license by MGM Resorts International.A short iron condor spread is a four-part strategy consisting of a bull put spread and a bear call spread in which the strike price of the short put is lower than the strike price of the short call. Text messaging is not available in all areas of the United States.īy signing up, you acknowledge you are at least 21 years old. Cellular, Verizon Wireless, Virgin Mobile USA, Tier 2/3 Carrier Group and Associated Carrier Group. Compatible carriers include Alltel Wireless, AT&T, Boost Mobile, Cricket Wireless, MetroPCS, Nextel, Sprint, T-Mobile®, U.S. You must have a two-way text-enabled phone with compatible carrier and plan. You also acknowledge that your agreement to receive these messages isn’t required as a condition to purchase goods or services. Once you have cancelled, you will not receive any additional messages unless you re-register.īy joining this subscription program you authorize Hipcricket to send you future automated marketing text messages on behalf of MGM Grand Las Vegas at the mobile number you have provided. You will be unsubscribed from our SMS text messaging service immediately. A message will be sent to your mobile device for verification.īy joining this program you agree to receive periodic text messages. MGM Grand Las Vegas offers text alerts to consumers interested in receiving property discounts as well as event and information related to MGM Grand Las Vegas.
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