Options University 11: Spread Trade Management

Video Summary (3 minutes)

When a spread is initially bought or sold, it has an initial risk, reward, and probability of profit. As time passes towards expiration, that spread will increase or decrease in value. Since many spreads are closed before they expire, traders often look towards their updated risk, reward and probability of profit to determine when to take profits, or cut losses.

COMPLEMENTARY READING

• Glossary of Options Trading Terms
• 6 Option Spreads Explained (Videos)