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Strike prices of credit spreads

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Credit spreads strike prices

 

When you put credit spreads, one of the choices you make is that of the Strike prices. Although this is mostly an individual choice, there is a sweet spot that balances the collection of premium with the probability of success, with success being defined as the credit spread expiring worthless.

 

Risk versus Reward – that’s what its all about. This video explains the optimal choice of strike prices for a credit spread. 

 

 

 

 

Would welcome your comments below. 

 

 

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