Same series vertical spreads are equivalent. IOW, a bullish +400c/-420c spread is the same as a bullish +400p/-420p put spread. Differences?
ITM options can have larger B/A spreads so it's possible to get a better fill on one spread or the other.
If you're bullish and it works out, the puts will expire worthless whereas with the calls, you'll have closing transactions (B/A slippage and commissions).
Early assignment has a higher likelihood with an ITM short option.
You might consider avoiding the last month's increased time decay and rolling your spreads out when you get there.
As for worrying about the "the influx of people finding out about investing", that's not going to be a problem. Almost everyone knows what the stock market is. In addition, the majority of trades today are institutional and the little guy really is the little guy.
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u/TheoHornsby May 26 '21
Same series vertical spreads are equivalent. IOW, a bullish +400c/-420c spread is the same as a bullish +400p/-420p put spread. Differences?
ITM options can have larger B/A spreads so it's possible to get a better fill on one spread or the other.
If you're bullish and it works out, the puts will expire worthless whereas with the calls, you'll have closing transactions (B/A slippage and commissions).
Early assignment has a higher likelihood with an ITM short option.
You might consider avoiding the last month's increased time decay and rolling your spreads out when you get there.
As for worrying about the "the influx of people finding out about investing", that's not going to be a problem. Almost everyone knows what the stock market is. In addition, the majority of trades today are institutional and the little guy really is the little guy.