Saturday, January 7
AAPL Jan 75-80 put spread let's hypothetically sell it at a $3.20 limit. If the stock comes in closer to $75 during the day (mon.) it might get taken. The stock should find support @ $75 after it broke through and closed above resistance there.
As we've noted before, vertical spreads have a limited profit and a limited loss. To sell a Jan 75-80 put spread, you have to sell a Jan 80 put and buy a Jan 75 put. The difference between the two prices is what the spread trades for, if we sell it, someone else buys it.
Then net amount of money goes into our trading account and sits there until we close out the trade by buying the same spread back. Hopefully for a lot less than we sell it for if our offer gets taken.