Call Backspread; Unlimited Profit, Capped Risk ☝

● Call Backspread; Unlimited Profit, Capped Risk
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Call Backspread. This is options trading. The Call Backspread is an options spread strategy where we are bullish on the underlying and we want unlimited profit potential but we still want to cap our risk. As such like a call options that caps our risk at 0 but we want to adjust the payout to make as much money as possible around a focused price and change the curve slightly. If the stock went to 0 we are not going to lose anything but if it stays where it is we want to cap our risk at some point. If it goes to the stratosphere then that's great. We reckon something is going to happen and we think it is more likely a bullish scenario but we also think the bearish aggressive thesis might happen. If it stays where it is we want to cap our risk anyway. OK.

Call Backspread Explained | Online Option Trading Guide
Bullish
Sell 1 in-the-money Call
Buy 2 out-of-the-money calls
Let's say stock XYZ trades at $43
Sell 1 $40 call at $400
Buy 2 $45 calls at $200 (x2)

PLEASE NOTE THAT THIS IS AN ADVANCED TUTORIAL. - if you are having problems understanding the concepts check out the full options course from the beginning.

Put Backspread; Unlimited Profit, Limited Risk Options Trading Strategy ☝
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