Open Sky

Open Sky

Set Up

Open SKY is a strategy, that if properly set up,  has no upside risk. The set up is :

Short Put
Call Spread (Short Call - Long Call)

For the setup to work the width of the Call spread must be less than the total premium received. In this example the width of the spread is $1. If the total premium received, including the short Put and the spread premium is more than a dollar the you have no risk to the upside.

Typically when  backtesting the Naked PUT will be above 30 Delta.

Profit Zone