In an Option Spread Strategy (E.g. a Bull Call Spread), How Many Times Does the Bid-Offer Spread Cost Factor In? ▴ Learn

In an Option Spread Strategy (E.g. a Bull Call Spread), How Many Times Does the Bid-Offer Spread Cost Factor In?

A typical option spread strategy, such as a bull call spread, involves at least two legs: buying one option and selling another. Since the trader must cross the spread for both the purchase (paying the offer) and the sale (receiving the bid), the spread cost factors in twice on execution.

Furthermore, if the position is closed, the spread cost is factored in twice again for unwinding the position.

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