Add training workflow, datasets, and runbook
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Bull Put Spread
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The last of the four vertical spreads is a bull put spread. A bull put spread is
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a short put with one strike and a long put with a lower strike. Both puts are
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on the same underlying and in the same expiration cycle. A bull put spread
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is a credit spread because the more expensive option is being sold, resulting
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in a net credit when the position is established. Using the same options as in
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the bear put example:
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With ExxonMobil at $80.55, the June 80 puts are sold for 1.75 and the
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June 75 puts are bought at 0.45. The trade is done for a credit of 1.30.
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Exhibit 9.10 shows the payout of this spread if it is held until expiration.
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EXHIBIT 9.10 ExxonMobil bull put spread.
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The sale of this spread generates a 1.30 net credit, which is represented by
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the maximum profit to the right of the 80 strike. With ExxonMobil above
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$80 per share at expiration, both options expire OTM and the premium is
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all profit. Between the two strike prices, the 80 put expires in the money. If
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the ITM put is still held at expiration, it will be assigned. Upon assignment,
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