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January 16th, 2012 at 4:16 pm
Phil,
I too want to make sure I understand Buying vs Selling spreads. For the TZA/Jerconn example you responded to, is this correct? If so, it seems different from numbers you stated or I am misunderstanding your response (all quotes per ToS):
TZA Close 1/13: $23.81
Buy TZA Jan 2013 $35 Put: Midpoint=$17.50, $11.19 ITM, Premium paid=$6.31
Sell TZA Jan 2013 $25 Put, Midpoint=$8.60, $1.19 ITM, Premium sold=$7.41
Buy TZA Jan 2013 $35/$25 Bear Put Spread, Midpoint=$9.03, Premium sold=$1.10