Long XYZ JUN 40 Call @ 7
Short XYZ JUN 50 Call @ 3
Type:
Net:
Breakeven:
Type: Debit Call Spread
Debit: You PAY to enter the spread.
Net debit = 7 − 3 = 4
Breakeven = 40 + 4 = 44
Rationale: You paid 4 points to open the spread, so the stock must rise 4 points above the lower strike before the position stops losing money.
Long RST SEP 90 Call @ 11
Short RST SEP 100 Call @ 6
Type:
Net:
Breakeven:
Type: Debit Call Spread
Debit: You PAY to enter the spread.
Net debit = 11 − 6 = 5
Breakeven = 90 + 5 = 95
Rationale: The 5‑point debit represents the initial cost, so the stock must rise 5 points above the lower strike to reach breakeven.
Long ABC MAR 120 Call @ 9
Short ABC MAR 130 Call @ 4
Type:
Net:
Breakeven:
Type: Debit Call Spread
Debit: You PAY to enter the spread.
Net debit = 9 − 4 = 5
Breakeven = 120 + 5 = 125
Rationale: The investor needs the stock to rise enough to recover the 5‑point debit before the spread can break even.
Long QED DEC 55 Call @ 8
Short QED DEC 65 Call @ 2
Type:
Net:
Breakeven:
Type: Debit Call Spread
Debit: You PAY to enter the spread.
Net debit = 8 − 2 = 6
Breakeven = 55 + 6 = 61
Rationale: The spread requires the stock to rise 6 points above the lower strike to offset the debit paid upfront.
Long XYZ OCT 70 Put @ 9
Short XYZ OCT 60 Put @ 4
Type:
Net:
Breakeven:
Type: Debit Put Spread
Debit = You PAY to enter the spread.
Net debit = 9 − 4 = 5
Breakeven = 70 − 5 = 65
Rationale: The investor paid 5 points to enter the bearish spread, so the stock must fall 5 points below the higher strike to eliminate the initial cost.
Long RST NOV 55 Put @ 6
Short RST NOV 50 Put @ 3
Type:
Net:
Breakeven:
Type: Debit Put Spread
Debit = You PAY to enter the spread.
Net debit = 6 − 3 = 3
Breakeven = 55 − 3 = 52
Rationale: The stock must decline 3 points below the higher strike to recover the debit and reach breakeven.
Long LMN APR 90 Put @ 12
Short LMN APR 80 Put @ 5
Type:
Net:
Breakeven:
Type: Debit Put Spread
Debit = You PAY to enter the spread.
Net debit = 12 − 5 = 7
Breakeven = 90 − 7 = 83
Rationale: The 7‑point debit means the stock must fall 7 points below the higher strike before the position stops losing money.
Long QED DEC 65 Put @ 10
Short QED DEC 55 Put @ 4
Type:
Net:
Breakeven:
Type: Debit Put Spread
Debit = You PAY to enter the spread.
Net debit = 10 − 4 = 6
Breakeven = 65 − 6 = 59
Rationale: The investor needs the stock to drop 6 points below the higher strike to offset the debit paid upfront.
Long XYZ JAN 50 Put @ 2
Short XYZ JAN 60 Put @ 9
Type:
Net:
Breakeven:
Type: Credit Put Spread
Credit = You’re PAID money to enter the spread.
Net credit = 9 − 2 = 7
Breakeven = 60 − 7 = 53
Rationale: The 7‑point credit cushions the downside, allowing the stock to fall to 53 before the spread begins losing money.
Long RST MAR 45 Put @ 1
Short RST MAR 55 Put @ 6
Type:
Net:
Breakeven:
Type: Credit Put Spread
Credit = You’re PAID money to enter the spread.
Net credit = 6 − 1 = 5
Breakeven = 55 − 5 = 50
Rationale: The credit reduces the breakeven point, meaning the stock can fall to 50 before losses occur.
Long QED DEC 55 Put @ 2
Short QED DEC 65 Put @ 9
Type:
Net:
Breakeven:
Type: Credit Put Spread
Credit = You’re PAID money to enter the spread.
Net credit = 9 − 2 = 7
Breakeven = 65 − 7 = 58
Rationale: The investor keeps the credit as long as the stock stays above 58, because the credit offsets the decline from the short strike.
Long LMN APR 80 Put @ 3
Short LMN APR 90 Put @ 10
Type:
Net:
Breakeven:
Type: Credit Put Spread
Credit = You’re PAID money to enter the spread.
Net credit = 10 − 3 = 7
Breakeven = 90 − 7 = 83
Rationale: The 7‑point credit lowers the breakeven, allowing the stock to fall to 83 before the spread becomes unprofitable.
Long XYZ JUN 70 Call @ 3
Short XYZ JUN 60 Call @ 9
Type:
Net:
Breakeven:
Type: Credit Call Spread
Credit = You’re PAID money to enter the spread.
Net credit = 9 − 3 = 6
Breakeven = 60 + 6 = 66
Rationale: The investor collected 6 points, so the stock can rise 6 points above the short strike before the position begins losing money.
Long RST SEP 110 Call @ 4
Short RST SEP 100 Call @ 11
Type:
Net:
Breakeven:
Type: Credit Call Spread
Credit = You’re PAID money to enter the spread.
Net credit = 11 − 4 = 7
Breakeven = 100 + 7 = 107
Rationale: The 7‑point credit allows the stock to rise to 107 before losses occur, because the credit offsets movement above the short strike.
Long LMN APR 150 Call @ 6
Short LMN APR 140 Call @ 13
Type:
Net:
Breakeven:
Type: Credit Call Spread
Credit = You’re PAID money to enter the spread.
Net credit = 13 − 6 = 7
Breakeven = 140 + 7 = 147
Rationale: The credit collected raises the breakeven point, meaning the stock can rise to 147 before the spread becomes unprofitable.
Long QED DEC 85 Call @ 5
Short QED DEC 75 Call @ 12
Net:
Breakeven:
Type: Credit Call Spread
Credit = You’re PAID money to enter the spread.
Net credit = 12 − 5 = 7
Breakeven = 75 + 7 = 82
Rationale: The investor keeps the credit unless the stock rises more than 7 points above the short strike, making 82 the breakeven level.
What _________ means in Spreads:
This means you PAY to enter the spread. Money flows out of your account.
How you get this value:
• You buy the more expensive option
• You sell the cheaper option
• Net result = you spend premium
Why it matters:
• ________ Spread = Bullish (need stock to rise)
• ________ Spread = Bearish (need stock to fall)
Debit
Debit Call Spread
Debit Put Spread
Memory Trick:
Debit = Dollars Exit
What _________ means in Spreads:
This means you are PAID money to enter the spread. Money flows into your account.
How you get this value:
• You sell the more expensive option
• You buy the cheaper option
• Net result = you collect premium
Why it matters:
• ________ Spread = Bearish (want stock to stay below short strike)
• ________ Spread = Bullish (want stock to stay above short strike)
Credit
Credit Call Spread
Credit Put Spread
Memory Trick:
Credit = Cash Incoming
Options:
Spreads:
A spread is the simultaneous purchase of one option and sale of another option of the same class (puts or calls):
A ________ spread is a long call and a short call. Is this bearish or bullish?
Call (BULLISH)
Options:
Spreads:
A spread is the simultaneous purchase of one option and sale of another option of the same class (puts or calls):
A ________ spread is a long put and a short put. Is this bearish or bullish?
Put (BEARISH)
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Chapter 8: Insurance Products: Fixed Vs. Variable Annuity128
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Chapter 17: Order Flow127
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Chapter 14: Risks & Disclosures78
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Chapter 11: Products: Hedge Funds, CMO’s, and CDO’s80
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Chapter 4: Corporate Bonds79
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Chapter 4: Bond Yield Memorization7
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Chapter 18: Handling Customer Accounts65
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Regulation Memory Sheet104
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Chapter 10: Other Packaged Products170
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Chapter 6: U.S. Treasury and Government Agency Securities89
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Chapter 9: Options Basics86
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Chapter 9: Options: Basic Strategies:43
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Chapter 9: Options Basic Test:31
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Chapter 9: Options: Intermediate Strategies:22
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Chapter 9: Options Intermediate Test: Spreads:20
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Chapter 9: Options Intermediate Test: Straddles:20
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Chapter 9: Options Intermediate Test: Index Options5
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Chapter 9: Options Intermediate Test: Combinations10
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Chapter 9: Options Intermediate Test: Hedging & Income20
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Chapter 1: The New Issues Market185
