T2W Bot

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In this article we will examine a specific case of a debit and a credit spread in order to point out that there is virtually very little difference between the two.
Instead of attempting to explain the concept by using a fictitious example, the stock XYZ with the one strike price being at this level and the other one at that level, etc, we shall utilize a couple of my recent trades for the same purpose. Again, this scrutiny is for education purposes only and it is not intended to be a recommendation of any kind.
My normal criteria for trading optionable stocks is the liquidity which is evident in the volume of the underlying as well as the high open interest and volume on individual strike prices. The Chevron Corporation has passed those minimum requirements. After knowing WHAT to trade, the issue becomes WHEN to trade it. Figure 1 shows that on 12-04-2008, the CVX was trading slightly above 70 which in the past had acted as a short-term diagonal support...

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