# Between Strikes

## OEX Index is between 600 and 605 at expiration

With the OEX exercise settlement value between the two strike prices of \$600 and \$605 at expiration, the short OEX 605 call would expire out-of-the-money and with no value, but the long 600 call would be in-the-money and worth its cash settlement amount. With OEX above the break-even point of 602.75, the settlement amount received for the 600 call would exceed the total debit initially paid for the spread and the investor would see a partial profit.

As an example, the OEX exercise settlement value is 604. The call’s cash settlement amount would be:

604 (settlement value) – 600 (call strike price) = \$4 x \$100 = \$400

The investor’s partial profit would be:

\$400 cash settlement amount received at call’s exercise
- \$275 total debit initially paid for spread
\$125 profit

On the other hand, if OEX settles below the break-even point (but above the lower 600 strike) the cash settlement amount will be less than the debit paid for the spread and a partial loss would be realized.

For instance, say the OEX exercise settlement value is 601. The call’s cash settlement amount would be:

601 (settlement value) – 600 (call strike price) = \$1 x \$100 = \$100

The investor’s partial loss would be:

\$275 total debit initially paid for spread
- \$100 cash settlement amount received at call’s exercise
\$175 loss

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