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  • Answer Upon - Vertical Spreads - Vertical Call Spread and Vertical Put Spread Value

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    d finish $2.00 in-the-money. The Feb. 55 calls would finish
    worthless because they are out-of-the-money. The spread,
    however, would
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    Any spread that has intrinsic value is considered in-the-money.
    How can you identify the value of a vertical call spread or a
    vertical put spread? Compare the stock price to the strike
    prices.

    Look at any vertical call spread. If the stock price is above
    the lower strike of the spread, then the spread is in-the-money.
    For example, in the Feb. 50 – 55 call spread, if the stock is
    trading at $52.00, then the spread would be in-the-money by $2.
    This is because if the spread expired today, the Feb. 50 calls
    would finish $2.00 in-the-money. The Feb. 55 calls would finish
    worthless because they are out-of-the-money. The spread,
    however, would
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    cal put spread? Compare the stock price to the strike
    prices.

    Look at any vertical call spread. If the stock price is above
    the lower strike of the spread, then the spread is in-the-money.
    For example, in the Feb. 50 – 55 call spread, if the stock is
    trading at $52.00, then the spread would be in-the-money by $2.
    This is because if the spread expired today, the Feb. 50 calls
    would finish $2.00 in-the-money. The Feb. 55 calls would finish
    worthless because they are out-of-the-money. The spread,
    however, would
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    r> the lower strike of the spread, then the spread is in-the-money.
    For example, in the Feb. 50 – 55 call spread, if the stock is
    trading at $52.00, then the spread would be in-the-money by $2.
    This is because if the spread expired today, the Feb. 50 calls
    would finish $2.00 in-the-money. The Feb. 55 calls would finish
    worthless because they are out-of-the-money. The spread,
    however, would
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    trading at $52.00, then the spread would be in-the-money by $2.
    This is because if the spread expired today, the Feb. 50 calls
    would finish $2.00 in-the-money. The Feb. 55 calls would finish
    worthless because they are out-of-the-money. The spread,
    however, would
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    d finish $2.00 in-the-money. The Feb. 55 calls would finish
    worthless because they are out-of-the-money. The spread,
    however, would be in-the-money with a value of $2.00.

    The rule is similar for determining whether or not a spread is
    out-of-the-money. If the stock price is lower then the lower
    strike of the spread, then the spread is out-of-the-money.
    Again, looking at the Feb. 50 – 55 call spread, if the spread
    expired today and the stock price closed at $48.00, (lower than
    the lower strike) then the spread would be out-of-the-money,
    thus the spread will be out-of-the-money. And, of course, if the
    stock is trading at the same price as the l

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