How to Calculate annualized.
Nov 15
written.
Strike
-60
If EXP
is NOV 26
how
many to expire - 11 days , we add 1 day extra for calculation
Premium
= 0.6 for 60 STR, so got $60 for 100 stocks
(60/12)
* 360 = ABC
in
financial world 1 year = 360 days.
60*100=6000
if assigned we have to have 6000 to buy the stock.
ABC /
6000
Rate of capital.
Credit spread 205 / 210, got $ 2
so mar profit for that spread 10 got 2. so 10-2 = 8
2/8 = 0.25 that means 25% is returned for $10. $20 is capital.
