Bull Put Vertical Spread

[zozo123]

Hi everyone, I'm kinda new to the options so please bear with me. got a quick question.

So lets say Stock XYZ is trading at $68 and I'm expecting a move higher so I place a bull put vertical also to protect myself from the downside. I sell the 70/67.5 vertical spread for a credit. I sell the 70 put for $3.03 and buy the 67.5 put for $1.01. The stock suddenly takes a dive (lets say because of an unexpected bad earnings release) and goes to $67.12. Now the 70 put now has a value of $2.88 and 67.5 put has a value of $0.54. Now my question is:

My initial order was: sell 70 put = collect $3.03 / buy 67.5 put = pay $1.01

But since all the values have changed;
At the expiration what will my mark be:
70-3.03=$66.97 (initial) or 70-2.88=$67.12 (recent)?

I mean will my initial order be in place or the recent prices be? Will I be assigned? Thank you very much for the answer.

 

[Martinghoul]

You have collected the premium worth $2.02. That is done and you're in a position where you're short the 70 put and long the 67.5 put. If the stock is at 67.12 at expiry, you will be assigned on the 70 put and you will exercise your 67.5 put, which means that you will lose $2.50 and end up flat. Your total net loss, therefore, will be $2.50 - $2.02 = $0.48.

 

[zozo123]

You have collected the premium worth $2.02. That is done and you're in a position where you're short the 70 put and long the 67.5 put. If the stock is at 67.12 at expiry, you will be assigned on the 70 put and you will exercise your 67.5 put, which means that you will lose $2.50 and end up flat. Your total net loss, therefore, will be $2.50 - $2.02 = $0.48.

Thanks man. Thank you very much!