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Posts Tagged ‘Intrinsic Value’


Options Trading: Intrinsic Value and the Vertical Spread

By Administrator on Wednesday, November 5th, 2008 | No Comments

An investor must always keep in mind that vertical spreads have an intrinsic value. This means it is possible to consider them ‘in the money.’ If a vertical spread has an intrinsic value, it can also have an extrinsic value. Unlike maximum intrinsic values that equal the difference between the strikes at expiration, maximum extrinsic [...]

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Options Trading Mastery: Understanding Spread Prices

By Administrator on Sunday, October 5th, 2008 | No Comments

During the life of a vertical call spread, the spread will trade between its minimum and maximum values (between 0 and the difference between the two strikes). In the case of a vertical call spread, the spread will trade closer to zero when the stock trades closer to or lower than the lower strike price. [...]

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