That would mean a move up to There are a number of different bullish strategies that would benefit from a bullish move. The upside breakeven point is The maximum possible profit is unlimited.
The next move would reduce your maximum possible loss on the call purchase while at the same time limiting your maximum possible profit. This would involve the sale of 10 SPX August calls at That means that you accrue an The new upside breakeven point has been lowered to In exchange for the lower breakeven point the maximum profit is now defined.
The maximum value of As soon as the SPX begins trading above the losses in the short calls negate in any gains in the long calls. The maximum possible profit is You can take things one step further by shorting an additional 10 SPX August calls at You have accrued a 7.
The maximum value for the bear spread is The minimum value for this spread is zero at or lower. The maximum profit of 7. The maximum loss of You have now created the long call butterfly spread.
The SPX bull call spread has been partnered up ten times with the bear call spread. The sweet spot for this trade occurs at where the bull call spread is at its maximum value while the bear call spread is still at its minimum value.
The two breakeven points are at At expiration if SPX settles at then you would have a profit of AS it starts to surpass it becomes less of a bullish and adjustment will have to be made. Account Settings Sign Out. Strategy Jul 9, ,More...