I leg into a CS by either buying the long end first (if I think we are at a bottom and it will move up) and hoping it moves up and then when the stock moves up I will sell short the (same dated but) higher strike Calls or.... if I think the stock is going lower before it moves up..... I will sell short the higher strike call and when the stock comes down I will buy the long end (nearer strike call) thereby lowering the cost of the spread.
If a stock moves up both Calls will move higher - if the stock moves lower both of the calls will move lower so the theory behind this is if, for example AAPL is $550 and you think the stock will go to $570 by OPEX you can buy a $560/$570CS so if you think the stock is not going down you could buy the $560 Call for $2.50 and sell the $570C for .75 that means the CS would cost you $1.75 to make a max gain of $10. that means you could get a 5.7 bagger. Now lets say AAPL moves up to $557 you could now sell those same $570C for $1.75 thereby bringing your cost down to .75. Now that same spread has a cost of .75 with the same max gain of $10. That would give you a max gain of a 13.3 bagger. But if you are wrong in the direction the stock goes immediately it willhurt you.
Market Data 
Markets 
AI
