Why do I open bull put spread instead of selling a short put?
A bull put spread doesn't use as much margin versus a short put.
Example of a trade that has similar premiums collected:
In this example, the bull put spread utilizes $1345 in margin versus the short put utilizes $5120 in margin. I can add another 5 more contracts and collect even more premiums for the same amount of margin utilization. The downside of a bull put spread is you're paying more in commission for opening a short put and long put at the same time.
Trades for June 5th:
A bull put spread doesn't use as much margin versus a short put.
Example of a trade that has similar premiums collected:
In this example, the bull put spread utilizes $1345 in margin versus the short put utilizes $5120 in margin. I can add another 5 more contracts and collect even more premiums for the same amount of margin utilization. The downside of a bull put spread is you're paying more in commission for opening a short put and long put at the same time.
Trades for June 5th:
- Opened 10 bull put spread for $AAPL $150/$145 for 2.30 premium. Expiry: Jun 9/17
- Sold a $NVDA July $130 put for 1.38 premium
- Opened 5 bull put spread for $V $90/$85 for 2.65 premium. Expiry: Aug 18/17
Trades for June 6th:
- Added 35 shares @ $14.40 of $ARCX to my TFSA account as I had some USD cash that wasn't being utilized.
- Sold a $GIS July $55 put for 0.63 premium
- Opened 10 bull put spread for $FB $150/146 for 3.40 premium. Expiry Jun 16/17
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