Hi All,
In analyzing a few potential trades, I would like to better understand the potential risk of selling bull spreads through Interactive Brokers.
For example, suppose I have a $100k margin account (4-1 leverage possible) and I would like to sell a bull spread:
Stock XYZ: Current Price = $100
Sell 10 Dec $100 Calls
Buy 10 Dec $150 Calls
Suppose that one day the stock gaps up to $200 per share – how is my loss marked to, say -$50k? Does a wide Bid/ask spread for each leg in such a…