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Strategies & Market Trends : Option Trades

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To: the options strategist who wrote (1650)	7/9/1999 10:34:00 PM
From: Woody Johnson	Read Replies (1) of 2341

Obviously the answer to your question depends on a lot of factors, expected volatility for one. But it seems to me the major disadvantage of opening a call debit spread just prior to execution is that there is not much time value left on your short position (credit), which is used to offset the cost of your long position (debit). One might as well just open a long position if you feel a pop is imminent. Obviously this is not a singular answer to a question with a lot of possibilities. Open for other thoughts... WJ

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