A call money spread that is closed prior to expiration has lower losses but higher profits for each stock price than if held to expiration.

Question

Quizplus · Accepted Answer

A call money spread's profit or loss potential is determined by the difference between the strike prices and the premiums paid or received for the options involved, not by whether it is closed before expiration. Closing a position early can affect the profit or loss due to time value and market conditions, but it does not inherently result in lower losses and higher profits for each stock price compared to holding to expiration.

A Call Money Spread That Is Closed Prior to Expiration