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Underlying: $Ford(F)$
View: Cautiously Bullish / Range-Bound (Expecting price to hold above $11.50 support)
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Strategy Type: Credit Spread / Bullish, Defined Risk
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Option Contract Portfolio:
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SELL 1 F May 15, 2026 $11.50 Put @ $0.065 (Mid)
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BUY 1 F May 15, 2026 $11.00 Put @ $0.015 (Mid)
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Max Gain & Loss: Max Gain = Net Credit = ~$0.05. Max Loss = (Strike Difference - Net Credit) = ($0.50 - $0.05) = ~$0.45 per spread.
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Initial Cost/Credit: Initial Credit of ~$0.05 per spread.
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Greek Exposure (Simulated):
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Delta: ~+0.20 (Slightly bullish)
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Theta: ~+$0.01 (Positive, benefits from time decay)
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Vega: ~-$0.002 (Slightly negative, benefits from a drop in IV)
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Gamma: ~-0.04 (Low, as it's a spread)
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Rho: ~$0.00 (Negligible for short-term spreads)
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Rationale: This strategy capitalizes on the view that the stock will stay above the key $11.50 support. It generates immediate income (positive Theta) and profits if the stock is flat or rises. The short put is placed at the primary support level. It benefits from a potential drop in IV (negative Vega) after the recent rebound-driven volatility. The long put at $11.00 defines and limits the risk. The positive Theta is the primary driver of profit in a range-bound or rising scenario.
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Time Frame: Short-Term (1 week to expiry).
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