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From course:

Option Trading Course Module 1

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Question:

What are the 4 possible outcomes of a CS (credit spread) trade?

Author: David J Perrot



Answer:

1. The Short strike and the Long Strike expires OTM (out of the money) 2. We close the 2 positions before expiration date with a minimal loss (max 30%) 3. The Short strike expires ITM (in the money) and the Long Strike expires OTM 4. The Short strike and the Long Strike expire ITM


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