First let me apologize in advance, I am an amateur in this world at best, and my terminology is a little weak. However this phrase "buy/sell a call spread" seemed pretty light on description every time I looked for more information.
Recently I have been dabbling in learning a bit about investing, I have some of the most basics covered market/limit orders buying and shorting stock. But I stumbled upon a few messages like this reading the news, blogs and doing some research:
Dan Nathan suggested on CNBC's Options Action investors should consider a bullish options strategy in Netflix, Inc. (NASDAQ: NFLX).
He wants to buy the May 145/165 call spread for a total cost of $5. The trade breaks even at $150 or 6.47 percent above the closing price on Friday and it can maximally make a profit of $15 if the stock jumps to $165 or higher.
What does it mean when Nathan wants to "Buy a Call Spread" how does that work?
What does the "Number/Number" notation signify?
How does he potentially profit or lose off that trade?
Please and thanks in advance!