Assuming you can get an order filled go the $49.5k credit, no. Math checks out.
Why not just buy calls or call spreads if your confident in the stock?
Electricengineer on
10*100*50 = 50k max loss with credit is 500 max loss, minus fees.
DennyDalton on
If you’re looking at after hours quotes, you’re wasting your time. They’re worthless.
Options that are this far ITM have very wide bid-ask spreads and tend to be very illiquid. That means that it’s hard to get a good credit and equally hard not to get ripped if you have to exit.
The odds of this trade making money are very low because the options are 40 points ITM. In addition, you’re likely to be assigned early, more so if there’s a decent dividend. It’s a very low probability trade, somewhat like a long shot bet on the worst horse when you’re at the track.
4 Comments
The ticker?
Assuming you can get an order filled go the $49.5k credit, no. Math checks out.
Why not just buy calls or call spreads if your confident in the stock?
10*100*50 = 50k max loss with credit is 500 max loss, minus fees.
If you’re looking at after hours quotes, you’re wasting your time. They’re worthless.
Options that are this far ITM have very wide bid-ask spreads and tend to be very illiquid. That means that it’s hard to get a good credit and equally hard not to get ripped if you have to exit.
The odds of this trade making money are very low because the options are 40 points ITM. In addition, you’re likely to be assigned early, more so if there’s a decent dividend. It’s a very low probability trade, somewhat like a long shot bet on the worst horse when you’re at the track.