Explore Your Options by Jay Kaeppel
BULL CALL SPREAD: IN-THE-MONEY OR OUT-OF-THE-MONEY?
I am expecting a specific price movement in a specific security. I am looking to enter a bull call spread in order to attempt to profit from this movement. My problem is I donít know if it would be better to: a) buy an in-the-money debit spread in order to increase the probability of profit, or b) buy an out-of-the-money debit spread in order to maximize profitability. Is there a way to choose?