Max Loss on a Spread

Max loss occurs when the stock moves completely through both strikes of your spread at expiration. Max Loss = (Spread Width x 100 x Quantity) - Total Premium Collected For example, if you sold a 5-point wide spread for $0.50 on 1 contract: - Max loss = ($5 x 100 x 1) - $50 = $450 To record a max loss in Tradez, click "Max Loss" from your campaign. The app automatically calculates the max loss amount based on your spread width and all premiums collected throughout the campaign. Commission and misc fees from the closing transaction are added on top. The campaign closes automatically after recording a max loss.