For a Spread to Be Successful, the Difference in Strike

question 92

True/False

For a spread to be successful, the difference in strike prices must be greater than the net cost of the purchased option(s).

---

Definitions:

Net Loss

Net loss occurs when a company's expenses exceed its revenues during a specific accounting period, resulting in a negative profit.

Dividend Revenue

Income received by investors from owning shares in a company, typically paid out from the company's profits.

Cash Dividends

Payments made by a corporation to its shareholders from its profit.

Equity Method

An accounting technique used to record investments in other companies by recognizing income and changes in value in proportion to ownership.