So lets see if my pea brain can digest that, lol...
If the stock hits 28, the spread should pay close to a buck, around a 100% gain.
The 26 calls, might hit $2.50 for a 40% gain or so. Would need to hit 29.60 for double.
Now here's the part I struggle with a little. If she drops to 25 bucks, I need to buy back the 27 calls I sold to buy the 26 calls. I suppose those calls would expire but might want to eliminate any risk. I can sell the 26 calls. I might net 20 cents on this? Let's call it a 60% loss.
The 26 calls might go for $1. A good 40% loss.
I could possiblye work up an expected value on this with some assumed probabilities and might see it's a wash (assuming I'm on the right path), but, I think the the fact that less principle to produce the same gain on the event the stock goes up a buck makes the vertical spread very attractive...
Good luck brother!
