If you choose not to use the 50% Rule and instead hold the trade until the final bell, your outcome will fall into one of these three categories:

Scenario 1: The Home Run

Price Level: SPY is BELOW $700

The Outcome: Both options expire worthless. The “Casino” wins.

Professional Action: Do Nothing. You keep 100% of the $83 credit you collected at the start.

Scenario 2: The Max Loss

Price Level: SPY is ABOVE $704

The Outcome: Both options are “In-the-Money.”

Professional Action: Your Safety Net kicks in. Your $704 long call offsets the loss from the $700 call you sold, capping your total loss at exactly $317.

Scenario 3: The Danger Zone (Pin Risk)

Price Level: SPY is sitting BETWEEN $700 and $704

The Outcome: You are “Pinned.” Your short call is worth money (liability), but your protection is worthless.

Professional Action: Manual Close. You must “Buy to Close” the entire spread before 4:00 PM on Friday. This prevents you from being forced into a short stock position over the weekend.

If you don’t close early, you must be prepared for Friday afternoon of expiration week.