any comments on the following BAC spread? (i know nothing about this, just re-posting for some one who had a question about the risk/reward) short 1 may $11 call long 3 jul $13 call looks like a db of $.20 with BAC about $12.50
spread is too fancy, the holy grail is to get the direction correct and only BUY calls or puts. u can sleep sound then.
I know I can be naive but what could happen placing this trade? The short call would be immediately assigned? Thanks.
the 11 call is in the money if stock price is currently 12.50. you will be assigned and you will have to buy the shares at the $11 price.
Another question. What about using this strategy on Vix? I mean buy 3 sept. calls and sell 1 June. It is impossible to be assigned with Vix. Loss is only between 2 BE. Is there any possible problem I do not see? Backtest on TOS works well but as often, live trading is different. Thanks very much.