Options Trading Concepts Live - July 20, 2021 - Vertical Spreads Debit vs Credit

published 1 week ago by tastytrade, Inc.

Nick and Errol dissect put/call parity and why ITM long spreads vs OTM short spread are synthetically the same position! Put/Call parity is a representation of the extrinsic value in ITM options vs OTM options at the same strikes. We use OTM spreads for better liquidity and tighter markets, and avoiding assignment risk.

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