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Showing content with the highest reputation on 06/26/17 in all areas
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I agree with this statement but that just makes it directional not leveraged.1 point
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Right, but the other aspect of leverage is the fact that the gains or losses are magnified in comparison to the movement of the underlying. Your position will move more than the stock, but in the same direction, that's all. I'm comparing it to buying the stock only because I think the rationale for the trade is the same. There must be some reason for believing AMZN will go up in the next 6 days or you wouldn't take this one.1 point
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It is simply a directional option spread, this does not make it leveraged. By definition a leveraged position is one that can lose more than the initial amount invested, which is clearly not possible here. We only trade options with this service so I am confused by the comparison to owning the underlying. Directional or not that comparison of options vs. the underlying could be made with regard to all of our trades.1 point
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How is a 50/20 Delta call debit spread a "very highly leveraged long position"?1 point
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