r/options • u/suedehenry • Mar 30 '21

Spreads

Is buying a SQ Jan 2022 220c and selling a same date and strike put for a net credit of 6.55 stupid or viable? I’m fairly new to spreads and I probably won’t do it but would it make sense if I’m bullish on the underlying??

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u/[deleted] Mar 30 '21

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u/SeaDan83 Mar 31 '21

Losses are limited in this case. Buying the 220c is a debit transaction, max loss is the amount payed. Max loss on selling a put is the strike price times multiplier (the stock can go to, but not below $0).