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1

The broker will let you make this trade, although probably not allow you to sell the 151 call after you buy the spread. The systems are smart enough to know that the 151 call is protecting you from infinite potential losses. You should never need to "exercise" this spread, or be forced to buy any stock. Just close out the spread on expiration day or sooner. ...


2

First, a small terminology correction. You don't buy a naked call. That's an outdated form of description from decades ago. A naked call is a short call that is not covered by long stock or a long call. Your broker allows such trades because the margin requirement (the risk) is the difference in strikes less the premium received. My broker ...


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