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Exam Code: 31860X Avaya IX Calling Design basics January 2024 by team

31860X Avaya IX Calling Design

Exam Specification: 31860X Avaya IX Calling Design

Exam Name: 31860X Avaya IX Calling Design
Exam Code: 31860X
Exam Duration: 90 minutes
Passing Score: 80%
Exam Format: Multiple-choice
Exam Delivery: Proctored online or at a testing center

Course Outline:

1. Introduction to Avaya IX Calling
- Overview of Avaya IX Calling solution
- Key features and benefits
- Architecture and components

2. Avaya IX Calling Design Fundamentals
- Understanding design principles and best practices
- Identifying customer requirements
- Assessing network infrastructure for Avaya IX Calling

3. Avaya IX Calling Planning and Configuration
- Planning dial plans and numbering schemes
- Call routing and call handling configuration
- Integrating with existing telephony systems

4. Avaya IX Calling Deployment and Implementation
- Installation and configuration of Avaya IX Calling components
- User provisioning and device registration
- Testing and troubleshooting

5. Avaya IX Calling Security and Compliance
- Overview of security considerations in Avaya IX Calling
- Implementing authentication and access control
- Compliance requirements and configurations

Exam Objectives:

1. Demonstrate understanding of Avaya IX Calling solution architecture and components.
2. Apply design principles and best practices for Avaya IX Calling deployment.
3. Analyze customer requirements and design appropriate dial plans and numbering schemes.
4. Configure call routing and call handling in Avaya IX Calling.
5. Integrate Avaya IX Calling with existing telephony systems.
6. Install, configure, and troubleshoot Avaya IX Calling components.
7. Provision users and register devices in Avaya IX Calling.
8. Implement security measures and comply with relevant regulations in Avaya IX Calling.

Exam Syllabus:

Section 1: Avaya IX Calling Overview (10%)
- Avaya IX Calling solution components
- Key features and benefits
- Integration options with other Avaya solutions

Section 2: Avaya IX Calling Design Principles (20%)
- Design considerations for Avaya IX Calling deployment
- Planning dial plans and numbering schemes
- Assessing network infrastructure requirements

Section 3: Avaya IX Calling Configuration (25%)
- Configuring call routing and call handling
- Implementing advanced features and customization options
- Integrating Avaya IX Calling with existing telephony systems

Section 4: Avaya IX Calling Deployment and Implementation (25%)
- Installing and configuring Avaya IX Calling components
- Provisioning users and registering devices
- Testing and troubleshooting

Section 5: Avaya IX Calling Security and Compliance (20%)
- Security considerations in Avaya IX Calling
- Implementing authentication and access control
- Complying with relevant regulations and standards
Avaya IX Calling Design
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Avaya IX Calling Design
Question: 32
A company needs to add 1200 users to an Avaya Auraź deployment, and wants the same level of audio and video
services for all users. But there is not enough bandwidth for audio and HD video calls for all of the existing and new
users. (Assume HD video uses 1 Mbps.)
What can they do to provide the same audio and video services to all users?
A. Decrease Minimum Multimedia Bandwidth to below 512 Kbps.
B. Increase Total Bandwidth parameter to 20 Mbps.
C. Increase Multimedia Bandwidth parameter to 10 Mbps.
D. Decrease Maximum Multimedia Bandwidth to below 512 Kbps.
Answer: D
Question: 33
A customer Is adding a branch location, and they have an Avaya Auraź core at their existing location. It is a
requirement that the equipment at the new branch location continues to provide service during WAN failures. This
includes the ability for callers to leave a voicemail message by having the call route from the new location over PRI to
the core location where the voicemail resides.
Assuming both locations have PRI and G450s, which Item needs to be included at the new location?
A. Standard Local Survivability
B. Survivable Remote server
C. Survivable Core server
D. Session Manager server
Answer: C
Question: 34
A design you are working on calls for several "G series" media gateways, and you have determined the number of
Digital Signal Processor (DSP) resources that are needed.
In which two ways can you determine how many "G series" gateways are needed in a design? (Choose two.)
A. Divide the calculated number of DSPs by 320 to determine how many G450s are needed.
B. Divide the calculated number of DSPs by 120 to determine how many G430s are needed.
C. Divide the calculated number of DSPs by 340 to determine how many G450S are needed.
D. Divide the calculated number of DSPs by 128 to determine how many G430s are needed.
Answer: B
Question: 35
You are interested in having multiple devices to register with the same extension number, but use only one user
Which three are required for the Multiple Device Access feature? (Choose three.)
A. Avaya Auraź Communication Manager
B. Avaya one-Xź Client Enablement Services
C. Avaya Auraź Session Manager
D. Avaya Auraź Application Enablement Services
E. Avaya Auraź System Manager
Answer: A,D,E
Question: 36
A customer has a main location and several remote locations with Avaya Auraź Survivable Remotes.
How many components can an Avaya IX™ IP Phone J169 SIP endpoint register to simultaneously?
A. Two Core Session Managers and a Communication Manager Survivable Core
B. Three Core Session Managers and a Branch Session Manager
C. Two Core Session Managers and a Branch Session Manager
D. Five Core Session Managers or Branch Session Managers
Answer: C
Question: 37
You have a customer who requires both SIP Trunking and Remote Workers. After examining the features needed
overall, you have determined that 700 Core Suite licenses are required. You still need to quote SBCE licenses, in
addition to the entitlements included with Core Suite licenses, to support a total of 120 PSTN SIP trunks and 330
remote workers. The customer has agreed to a 3 remote worker users to 1 session access basis.
How many additional standard and advanced a la carte SBCE licenses are needed? (Choose two.)
A. 30 SBCE Standard Licenses
B. 20 SBCE Standard Licenses
C. 10 SBCE Advanced Licenses
D. 20 SBCE Advanced Licenses
Answer: C
Question: 38
What is a benefit of Session Manager?
A. It centralizes the management of remote gateways.
B. It provides SIP application interoperability across multi-vendor equipment.
C. It provides traditional analog trunking to the edge devices.
D. It de-centralizes management of phones and users enterprise-wide.
Answer: A
Question: 39
You are creating a new Communication Manager design. You have included Avaya provided servers with G450
gateways. The solution requires 200 – H.323 telephones. Trunk service from the PSTN will be IP trunks. Shuffling
will be enabled. They have also requested call recording via Device Media Call Control (DMCC) application
programming interface.
To record all IP endpoints simultaneously, how many DSP resources are required?
A. 800 DSP resources
B. 600 DSP resources
C. 400 DSP resources
D. 200 DSP resources
Answer: A
Question: 40
You are reviewing a design done by another engineer, and want to be sure there are enough Touch Tone Receiver
(TTR) resources.
Which component of the design uses TTR resources?
B. 323 endpoints
C. SIP endpoints
D. Analog endpoints
E. SIP trunks
Answer: C
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Avaya Calling basics - BingNews Search results Avaya Calling basics - BingNews The Basics of Covered Calls

A covered call involves a seller offering buyers a call option at a set price and expiration date on a security that the seller owns. Professional market players write covered calls to boost investment income. Individual investors can also benefit from the conservative but effective covered call option strategy by taking the time to learn how it works and when to use it.

Read on for more about a covered call and the ways that it can enhance income, lower portfolio risk, and Boost investment returns.

Key Takeaways

  • A covered call is a popular options strategy used to generate income for investors who think stock prices are unlikely to rise much further in the near term.
  • A covered call is constructed by holding a long position in a stock and then selling (writing) call options on that same asset, representing the same size as the underlying long position.
  • A covered call will limit the investor's potential upside profit and may not offer much protection if the stock price drops.

What Is a Covered Call?

You are entitled to several rights as a stock or futures contract owner, including the right to sell the security at any time for the market price. Covered call writing sells this right to someone else in exchange for cash, meaning the buyer of the option gets the right to purchase your security on or before the expiration date at a predetermined price called the strike price.

A call option is a contract that gives the buyer the legal right (but not the obligation) to buy shares of the underlying stock or one futures contract at the strike price at any time on or before expiration. If the seller of the call option also owns the underlying security, the option is considered "covered" because they can deliver the instrument without purchasing it on the open market at possibly unfavorable pricing.

If the contract is not a covered call, it is called a naked call, used to generate a premium without owning the underlying asset.

Covered Call Visualization

In the diagram below, the horizontal line is the security's price, and the vertical line is the profit or loss potential. The dots on the profit or loss potential line indicate the amount of profit or loss the covered call seller might experience as the price moves.

On the horizontal price line, the seller would break even when the price intersects a profit or loss potential of zero. The contract seller will likely set the strike price at the point they think the price will intersect the profit potential limit, indicated by the blue dot on the price line.

Image by Julie Bang © Investopedia 2019

Profiting from Covered Calls

The buyer pays the seller of the call option a premium to obtain the right to buy shares or contracts at a predetermined future price (the strike price). The premium is a cash fee paid on the day the option is sold and is the seller's money to keep, regardless of whether the option is exercised.

A covered call is therefore most profitable if the stock moves up to the strike price, generating profit from the long stock position. Covered calls can expire worthless (unless the buyer expects the price to continue rising and exercises), allowing the call writer to collect the entire premium from its sale.

If the covered call buyer exercises their right, the call seller will sell the shares at the strike price and keep the premium, profiting from the difference in the price they paid for the share and the selling price plus the premium. However, by selling the share at the strike price, the seller gives up the opportunity to profit from further share price increases.

When to Sell a Covered Call

When you sell a covered call, you get paid in exchange for giving up a portion of future upside. For example, assume you buy XYZ stock for $50 per share, believing it will rise to $60 within one year. You're also willing to sell at $55 within six months, giving up further upside while taking a short-term profit. In this scenario, selling a covered call on the position might be an attractive strategy.

The stock's option chain indicates that selling a $55 six-month call option will cost the buyer a $4 per share premium. You could sell that option against your shares, which you purchased at $50, and hope to sell at $60 within a year. Writing this covered call creates an obligation to sell the shares at $55 within six months if the underlying price reaches that level. You get to keep the $4 in premium plus the $55 from the share sale, for a total of $59, or an 18% return over six months.

On the other hand, you'll incur a $10 loss on the original position if the stock falls to $40—the buyer will not exercise the option because they can buy the stock cheaper than the contract price. However, you get to keep the $4 premium from the sale of the call option, lowering the total loss from $10 to $6 per share.

Bullish Scenario: Shares Rise to $60 and the Option Is Exercised
January 1 Buy XYZ shares at $50
January 1 Sell XYZ call option for $4—expires on June 30, exercisable at $55
June 30 Stock closes at $60—option is exercised because it is above $55 and you receive $55 for your shares.
July 1 PROFIT: $5 capital gain + $4 premium collected from sale of the option = $9 per share or 18%
Bearish Scenario: Shares Drop to $40 and the Option Is Not Exercised
January 1 Buy XYZ shares at $50
January 1 Sell XYZ call option for $4—expires on June 30, exercisable at $55
June 30 Stock closes at $40—option is not exercised, and it expires worthless because the stock is below the strike price (the option buyer has no incentive to pay $55/share when they can purchase the stock at $40).
July 1 LOSS: $10 share loss—$4 premium collected from the sale of the option = $6 or -12%. 

Advantages of Covered Calls

Selling covered call options can help offset downside risk or add to upside return, taking the cash premium in exchange for future upside beyond the strike price plus premium during the contract period. In other words, if XYZ stock in the example closes above $59, the seller earns less return than if they held the stock. However, if the stock ends the six-month period below $59 per share, the seller makes more money or loses less money than if the options sale hadn't taken place.

Risks of Covered Calls

Call sellers have to hold onto underlying shares or contracts or they'll be holding naked calls, which have theoretically unlimited loss potential if the underlying security rises. Therefore, sellers need to buy back options positions before expiration if they want to sell shares or contracts, increasing transaction costs while lowering net gains or increasing net losses.

Frequently Asked Questions

What Are the Main Benefits of a Covered Call?

The main benefits of a covered call strategy are that it can generate premium income, boost investment returns, and help investors target a selling price above the current market price.

What Are the Main Drawbacks of a Covered Call?

The main drawbacks of a covered call strategy are the risk of losing money if the stock plummets (in which case the investor would have been better off selling the stock outright rather than using a covered call strategy) and the opportunity cost of having the stock "called" away and forgoing any significant future gains in it.

Is There a Risk If I Sell the Underlying Stock Before the Covered Call Expires?

Yes, this can be a huge risk, since selling the underlying stock before the covered call expires would result in the call now being "naked" as the stock is no longer owned. This is akin to a short sale and can generate unlimited losses in theory.

Should I Write a Covered Call on a Core Stock Position with Large Unrealized Gains That I Wish to Hold for the Long Term?

It might not be advisable to do so since selling the stock may trigger a significant tax liability. In addition, if the stock is a core position you wish to hold for the long term, you might not be too happy if it is called away.

The Bottom Line

You can use covered calls to decrease the cost basis or to gain income from shares or futures contracts. When you use one, you're adding a profit generator to stock or contract ownership. 

Like any strategy, covered call writing has advantages and disadvantages. If used with the right stock, covered calls can be a great way to reduce your average cost or generate income.

Mon, 18 Dec 2023 10:00:00 -0600 en text/html
The Importance of Business Conference Calls

A business conference call is simply a telephone call involving three or more people. It allows people in different geographic locations to "meet" at a prearranged time via telephone, or to resolve an urgent business issue that requires input of several individuals. Conference calling can be vital to the success of a business, as it can greatly facilitate business communications.

Tue, 05 Apr 2011 00:24:00 -0500 en-US text/html
Call Centre Workforce Management Software Market Insights and Forecast to 2030 | Calabrio, Avaya, Injixo | 102 Pages Report

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Short Description About Call Centre Workforce Management Software Market:

The Global Call Centre Workforce Management Software market is anticipated to rise at a considerable rate during the forecast period, between 2023 and 2030. In 2022, the market is growing at a steady rate and with the rising adoption of strategies by key players, the market is expected to rise over the projected horizon.

North America, especially The United States, will still play an important role which cannot be ignored. Any changes from United States might affect the development trend of Call Centre Workforce Management Software. The market in North America is expected to grow considerably during the forecast period. The high adoption of advanced technology and the presence of large players in this region are likely to create ample growth opportunities for the market.

Europe also play important roles in global market, with a magnificent growth in CAGR During the Forecast period 2022-2030.

Call Centre Workforce Management Software Market size is projected to reach Multimillion USD by 2030, In comparison to 2022, at unexpected CAGR during 2022-2030.

Despite the presence of intense competition, due to the global recovery trend is clear, investors are still optimistic about this area, and it will still be more new investments entering the field in the future.

This report focuses on the Call Centre Workforce Management Software in global market, especially in North America, Europe and Asia-Pacific, South America, Middle East and Africa. This report categorizes the market based on manufacturers, regions, type and application.

The report focuses on the Call Centre Workforce Management Software market size, segment size (mainly covering product type, application, and geography), competitor landscape, accurate status, and development trends. Furthermore, the report provides detailed cost analysis, supply chain.

Technological innovation and advancement will further optimize the performance of the product, making it more widely used in downstream applications. Moreover, Consumer behavior analysis and market dynamics (drivers, restraints, opportunities) provides crucial information for knowing the Call Centre Workforce Management Software market.

Get a sample Copy of the Call Centre Workforce Management Software Report 2023

What are the factors driving the growth of the Call Centre Workforce Management Software Market?

Growing demand for below applications around the world has had a direct impact on the growth of the Call Centre Workforce Management Software

Cloud Based

Which regions are leading the Call Centre Workforce Management Software Market?

  • North America (United States, Canada and Mexico)
  • Europe (Germany, UK, France, Italy, Russia and Turkey etc.)
  • Asia-Pacific (China, Japan, Korea, India, Australia, Indonesia, Thailand, Philippines, Malaysia and Vietnam)
  • South America (Brazil, Argentina, Columbia etc.)
  • Middle East and Africa (Saudi Arabia, UAE, Egypt, Nigeria and South Africa)

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This Call Centre Workforce Management Software Market Research/Analysis Report Contains Answers to your following Questions

  • What are the global trends in the Call Centre Workforce Management Software market? Would the market witness an increase or decline in the demand in the coming years?
  • What is the estimated demand for different types of products in Call Centre Workforce Management Software? What are the upcoming industry applications and trends for Call Centre Workforce Management Software market?
  • What Are Projections of Global Call Centre Workforce Management Software Industry Considering Capacity, Production and Production Value? What Will Be the Estimation of Cost and Profit? What Will Be Market Share, Supply and Consumption? What about Import and Export?
  • Where will the strategic developments take the industry in the mid to long-term?
  • What are the factors contributing to the final price of Call Centre Workforce Management Software? What are the raw materials used for Call Centre Workforce Management Software manufacturing?
  • How big is the opportunity for the Call Centre Workforce Management Software market? How will the increasing adoption of Call Centre Workforce Management Software for mining impact the growth rate of the overall market?
  • How much is the global Call Centre Workforce Management Software market worth? What was the value of the market In 2020?
  • Who are the major players operating in the Call Centre Workforce Management Software market? Which companies are the front runners?
  • Which are the accurate industry trends that can be implemented to generate additional revenue streams?
  • What Should Be Entry Strategies, Countermeasures to Economic Impact, and Marketing Channels for Call Centre Workforce Management Software Industry?

Call Centre Workforce Management Software Market – Covid-19 Impact and Recovery Analysis:

We were monitoring the direct impact of covid-19 in this market, further to the indirect impact from different industries. This document analyzes the effect of the pandemic on the Call Centre Workforce Management Software market from a international and nearby angle. The document outlines the marketplace size, marketplace traits, and market increase for Call Centre Workforce Management Software industry, categorised with the aid of using kind, utility, and patron sector. Further, it provides a complete evaluation of additives concerned in marketplace improvement in advance than and after the covid-19 pandemic. Report moreover done a pestel evaluation within the business enterprise to study key influencers and boundaries to entry.

Our studies analysts will assist you to get custom designed info to your report, which may be changed in phrases of a particular region, utility or any statistical info. In addition, we’re constantly inclined to conform with the study, which triangulated together along with your very own statistics to make the marketplace studies extra complete for your perspective.

Final Report will add the analysis of the impact of Russia-Ukraine War and COVID-19 on this Call Centre Workforce Management Software Industry.


1 Market Overview
1.1 Product Overview and Scope of Call Centre Workforce Management Software
1.2 Classification of Call Centre Workforce Management Software by Type
1.2.1 Overview: Global Call Centre Workforce Management Software Market Size by Type: 2017 Versus 2021 Versus 2030
1.2.2 Global Call Centre Workforce Management Software Revenue Market Share by Type in 2021
1.3 Global Call Centre Workforce Management Software Market by Application
1.3.1 Overview: Global Call Centre Workforce Management Software Market Size by Application: 2017 Versus 2021 Versus 2030
1.4 Global Call Centre Workforce Management Software Market Size and Forecast
1.5 Global Call Centre Workforce Management Software Market Size and Forecast by Region
1.6 Market Drivers, Restraints and Trends
1.6.1 Call Centre Workforce Management Software Market Drivers
1.6.2 Call Centre Workforce Management Software Market Restraints
1.6.3 Call Centre Workforce Management Software Trends Analysis

2 Company Profiles
2.1 Company
2.1.1 Company Details
2.1.2 Company Major Business
2.1.3 Company Call Centre Workforce Management Software Product and Solutions
2.1.4 Company Call Centre Workforce Management Software Revenue, Gross Margin and Market Share (2019, 2020, 2021 and 2023)
2.1.5 Company accurate Developments and Future Plans

3 Market Competition, by Players
3.1 Global Call Centre Workforce Management Software Revenue and Share by Players (2019,2020,2021, and 2023)
3.2 Market Concentration Rate
3.2.1 Top3 Call Centre Workforce Management Software Players Market Share in 2021
3.2.2 Top 10 Call Centre Workforce Management Software Players Market Share in 2021
3.2.3 Market Competition Trend
3.3 Call Centre Workforce Management Software Players Head Office, Products and Services Provided
3.4 Call Centre Workforce Management Software Mergers and Acquisitions
3.5 Call Centre Workforce Management Software New Entrants and Expansion Plans

4 Market Size Segment by Type
4.1 Global Call Centre Workforce Management Software Revenue and Market Share by Type (2017-2023)
4.2 Global Call Centre Workforce Management Software Market Forecast by Type (2023-2030)

5 Market Size Segment by Application
5.1 Global Call Centre Workforce Management Software Revenue Market Share by Application (2017-2023)
5.2 Global Call Centre Workforce Management Software Market Forecast by Application (2023-2030)

6 Regions by Country, by Type, and by Application
6.1 Call Centre Workforce Management Software Revenue by Type (2017-2030)
6.2 Call Centre Workforce Management Software Revenue by Application (2017-2030)
6.3 Call Centre Workforce Management Software Market Size by Country
6.3.1 Call Centre Workforce Management Software Revenue by Country (2017-2030)
6.3.2 United States Call Centre Workforce Management Software Market Size and Forecast (2017-2030)
6.3.3 Canada Call Centre Workforce Management Software Market Size and Forecast (2017-2030)
6.3.4 Mexico Call Centre Workforce Management Software Market Size and Forecast (2017-2030)

7 Research Findings and Conclusion

8 Appendix
8.1 Methodology
8.2 Research Process and Data Source
8.3 Disclaimer

9 Research Methodology

10 Conclusion


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Wed, 13 Dec 2023 10:01:00 -0600 en text/html
Which Vertical Option Spread Should You Use?

Understanding the features of the four basic types of vertical spreads—bull call, bear call, bull put, and bear put—is a great way to further your learning about relatively advanced options strategies.

Yet to deploy these strategies effectively, you also need to develop a thorough understanding of which option spread to use in a given trading environment or specific stock situation.

First, let’s review the main features of the four basic vertical spreads.

Key Takeaways

  • Option spreads are common strategies used to minimize risk or to bet on various market outcomes using two or more options.
  • In a vertical spread, an individual simultaneously purchases one option and sells another (on the same underlying asset) at a higher strike price using both calls or both puts.
  • A bull vertical spread profits when the underlying stock's price rises.
  • A bear vertical spread profits when the underlying stock's price falls.

Basic Features of Vertical Spreads

Each vertical spread involves buying and writing puts or calls at different strike prices. Each spread has two legs. For one leg you buy an option, and for the other leg you write an option.

This can result in an option position (containing two legs) that gives the trader a credit or debit. A debit spread is one that costs the trader money. For example, one option costs $300, but the trader receives $100 from selling the option in other position. The net premium cost is a $200.

The reverse situation, where the trader receives $300 for putting on an option trade and spends $100 for the other option, results in a net premium credit of $200.

Types of Vertical Spreads

Here is how each spread is executed:

  • A bull call spread involves purchasing a call option, and simultaneously selling another call option (on the same underlying asset) with the same expiration date but a higher strike price. This is a debit spread, with the maximum loss restricted to the net premium paid for the position. The maximum profit is equal to the difference in the strike prices of the calls less the net premium paid to put on the position.
Image by Sabrina Jiang © Investopedia 2020 
  • A bear call spread involves selling a call option, and simultaneously purchasing another call option with the same expiration date but at a higher strike price. This is a credit spread, with the maximum gain restricted to the net premium received for the position. The maximum loss is equal to the difference in the strike prices of the calls less the net premium received.
Image by Sabrina Jiang © Investopedia 2020
  • A bull put spread involves writing a put option, and simultaneously purchasing another put option with the same expiration date but a lower strike price. This is a credit spread, with the maximum gain restricted to the net premium received for the position. The maximum loss is equal to the difference in the strike prices of the puts less the net premium received.
Image by Sabrina Jiang © Investopedia 2020
  • A bear put spread involves purchasing a put option, and simultaneously selling another put option with the same expiration date but a lower strike price. This is a debit spread, where the maximum loss is restricted to the net premium paid for the position. The maximum profit is equal to the difference in the strike prices of the puts less the net premium paid to put on the position.
Image by Sabrina Jiang © Investopedia 2020

The table below summarizes the basic features of these four spreads. Commissions are excluded for simplicity.



Strike Prices

Debit / Credit

Max. Gain

Max. Loss


Bull Call

Buy Call C1
Write Call C2

Strike price of C2 > C1


(C2 − C1) − Premium paid

Premium paid

C1 + Premium

Bear Call

Write Call C1
Buy Call C2

Strike price of C2 > C1


Premium received

(C2 − C1) − Premium received

C1 + Premium

Bull Put

Write Put P1
Buy Put P2

Strike price of P1 > P2


Premium received

(P1 − P2) − Premium received

P1 − Premium

Bear Put

Buy Put P1
Write Put P2

Strike price of P1 > P2


(P1 − P2) − Premium paid

Premium paid

P1 − Premium

Credit and Debit Spreads

Vertical spreads are used for two primary reasons:

  1. To reduce the premium amount payable (debit spreads).
  2. To lower the option position’s risk (credit spreads).

Reduce Premium Cost

Let’s evaluate the first point. Option premiums can be quite expensive when overall market volatility is elevated, or when a specific stock’s implied volatility is high. While a vertical spread caps the maximum gain that can be made from an option position, compared to the profit potential of a stand-alone call or put, it also substantially reduces the position’s cost.

Thus, such spreads can be used during periods of elevated volatility, since the volatility on one leg of the spread will offset volatility on the other leg.

Lower Risk

As far as credit spreads are concerned, they can greatly reduce the risk of writing options, since option writers take on significant risk to pocket a relatively small amount of option premium. One disastrous trade can wipe out positive results from many successful option trades. In fact, option writers are occasionally disparagingly referred to as individuals who stoop to collect pennies on the railway track. They happily do so—until a train comes along and runs them over.

Writing naked (uncovered) calls is among the riskiest option strategies, since the potential loss if the trade goes awry is theoretically unlimited. Writing puts is comparatively less risky, but an aggressive trader who has written puts on numerous stocks would be stuck with a large number of pricey stocks in a sudden market crash. Credit spreads mitigate this risk, although the cost of this risk mitigation is a lower amount of option premium.

Which Vertical Spread to Use

Bull Call Spread

Consider using a bull call spread when calls are expensive due to elevated volatility and you expect moderate upside rather than huge gains. This scenario is typically seen in the latter stages of a bull market, when stocks are nearing a peak and gains are harder to achieve.

A bull call spread can also be effective for a stock that has great long-term potential but elevated volatility due to a accurate plunge.

Bear Call Spread

Consider using a bear call spread when volatility is high and a modest downside is expected. This scenario is typically seen in the final stages of a bear market or correction, when stocks are nearing a trough but volatility is still elevated because pessimism reigns supreme.

Bull Put Spread

Consider using a bull put spread to earn premium income in sideways to marginally higher markets, or to buy stocks at reduced prices when markets are choppy. Buying stocks at reduced prices is possible because the written put may be exercised to buy the stock at the strike price. The credit received reduces the cost of buying the shares (compared to if the shares were bought at the strike price directly). 

This strategy is especially appropriate to accumulate high-quality stocks at cheap prices when there is a sudden bout of volatility but the underlying trend is still upward. A bull put spread is akin to “buying the dips,” with the added bonus of receiving premium income in the bargain.

Bear Put Spread

Consider using a bear put spread when a moderate to significant downside is expected in a stock or index and volatility is rising. Bear put spreads can also be considered during periods of low volatility to reduce the dollar amounts of premiums paid. For example, if you're seeking to hedge long positions after a strong bull market.

There is always a trade-off. Before establishing a spread trade, consider what you supply up or gain by choosing different strike prices. Consider the probabilities that the maximum gain will be attained or that the maximum loss will be taken. While it is possible to create trades with high theoretical gains, if the probability of that gain is minuscule, and if the likelihood of losing is high, then consider a more balanced approach.

Factors to Consider

The following factors may assist you in coming up with an appropriate options/spread strategy for existing conditions and your outlook on the market.

  • Bullish or bearish: Are you positive or negative on the markets? If you are very bullish, then you might be better off considering stand-alone calls (not a spread). But if you are expecting a modest upside, then consider a bull call spread or a bull put spread. Likewise, if you are modestly bearish or want to reduce the cost of hedging your long positions, then the bear call spread or bear put spread may be the answer.
  • Volatility view: Do you expect volatility to rise or fall? Rising volatility may favor the option buyer, which favors debit spread strategies. Declining volatility improves the odds for the option writer, which favors credit spread strategies.
  • Risk versus reward: A preference for limited risk with potentially greater reward is more an option buyer’s mentality. If you seek limited reward for possibly greater risk, this is more in line with the option writer’s mentality.

Based on the above, if you are modestly bearish, think volatility is rising, and prefer to limit your risk, then the best strategy would be a bear put spread.

Conversely, if you are moderately bullish, think volatility is falling, and are comfortable with the risk-reward payoff of writing options, then you should opt for a bull put spread.

Which Strike Prices to Choose

The table above outlined whether the bought option is above or below the strike price of the written option. Which strike prices to use depends on a trader’s outlook on the market.

For example, with a bull call spread, if the price of a stock is likely to stay around $55 until the options expire, then you may buy a call with a strike near 50 and sell a call at the 55 strike. If the stock is unlikely to move much, then selling a 60-strike call makes a bit less sense because the premium received will be lower. Buying a call with a 52 or 53 strike would be cheaper than buying the 50-strike price call, but there is greater downside protection with the lower strike.

Who Is a Vertical Spread for?

Vertical spreads are useful to options traders who want to benefit from specific directional market moves and also limit their financial risk.

Is a Vertical Spread a Hedge?

Yes, you're hedging your bet by buying and selling the same option type. You're taking positions on both sides of the market so that, while you hope to make money on one side, the other side protects you from the risk of losing too much money if the market moves contrary to your outlook. While useful, the downside of a hedge is that any profit gained from one position is reduced by the loss from the other.

Why Is the Spread Referred to As Vertical?

The term "vertical" refers to the higher and lower strike prices. One is above, the other is below. A spread can be horizontal, where the strike prices are the same but the expiration dates are different.

The Bottom Line

A vertical option spread is the simultaneous purchase and sale of the same option type (a call or a put) with the same expiration date but with different strike prices.

Understanding which option spread strategy to use in different market conditions can significantly Boost your odds of success in options trading.

Look at current market conditions and consider your own analysis. Before pulling the trigger on a trade, determine which vertical spread, if any, best suits the situation and then consider which strike prices make the most sense.

Tue, 16 Jun 2015 07:40:00 -0500 en text/html
Avaya-Nortel Confirms Product Road Map, Will Preserve Data Portfolio

It will also maintain Nortel's data networking portfolio, offer VARs both Nortel and Avaya options for SMB-centric IP and unified communications suites, and will decide on its future distributor relationships by the end of March.

Details of the road map, confirmed to in an interview with Todd Abbott, Avaya senior vice president of sales and president of field operations, were provided to Avaya and Nortel VARs and distributors under nondisclosure agreements last week and in some cases, earlier this month.

Overall, the road map suggests Avaya is attuned to not disrupting the sizable Nortel installed base, and at least in the short term, is committed to keeping much of both existing portfolios intact -- even if it means product overlap in some segments.

Avaya Aura -- the company's virtualized unified communications platform -- will be the centerpiece of much of its product go-to-market strategy, as Avaya itself has been saying for the past year.

"The feedback, as we'd hoped for, has been positive," Abbott said of his discussions with Avaya and Nortel partners. "There's a really strong blend of the two product lines, and we've been impressed with the technology we've seen from Nortel. ACE [Nortel's applications/services integration environment], for example, fills a void for us in an application layer to interface with our SIP session-based architecture. That was something we had developed, but what we have is nowhere near ACE. There are a lot of products like that, and a lot are very good for our architecture and very complementary."

VARs have been telling since at least Avaya's Americas Partner Conference in Nashville that optimism on Avaya would depend on how Avaya executed on the Nortel product and channel integration. Here's what they'll know as of Tuesday:


The current road map has Avaya planning to end-of-sale three products in the Nortel portfolio, and one in the Avaya portfolio.

From Nortel, Avaya will end-of-sale the Nortel dialer ("a point product," Abbott said), the "m" version of the CS1K communications server line, and the 5300 model application server.

The fourth product to go is Avaya's Contact Center Express, in favor of Nortel's CC 7, which Avaya will now use as its principal midmarket call center offering. Elements of Contact Center Express, Abbott said, will be integrated into CC 8 -- a future version expected to be finished within 9 months.

All four products will go through Avaya's end-of-sale process, which means they'll be sold for six more months and serviced for six more years, as they're gradually phased out of the overall portfolio.

"We're not creating any issues for customers thinking the infrastructure they've invested in is now outdated," Abbott said. "There's really no investment protection issue for our customers and partners, who can migrate and evolve their infrastructures over time."

Abbott acknowledged that there will be substantial overlap in some product categories. For example, Avaya will continue to offer both Avaya's IP Office and Nortel's Business Communications Manager -- SMB-geared products similar enough to elicit VAR doubts there'd be room left for both.

"Our message to the market is that both of these products are going to be retained and investment will continue in both," Abbott said. "We want to make it smooth so that we can move to a consolidated platform over time."

Abbott said he wasn't worried that minimal changes to the Avaya and Nortel portfolios would confuse partners. Minimal disruption was precisely the point, he argued.

"Two product lines and only four end-of-sales. That's pretty significant," Abbott said. "Nortel fills in some voids that we had as well and Avaya fills in some voids that they had. The first phase of the process was to align as much as possible on the SIP-session-based architecture, and there was great commonality relative to where both teams thought the technology needed to go. There was a lot less protectiveness between [engineers] than you might think."

Nortel partners joining Avaya will go through authorization and certification on Avaya products, and existing Avaya VARs will need to do the same on Nortel products.

As Avaya described at the Partner Conference, it's created a new badge for Nortel's data networking portfolio. Avaya has opted to preserve Nortel's entire data networking line, despite rumors that it would look to sell it or spin it off based on the fact that Nortel's market share in data networking is dwarfed by those of HP and Cisco.

"This is critical for us," Abbott said. "Today we compete with a two-box solution. If you're going to judge us based on the R&D required to be a full-fledged router and switch company, those concerns would be valid. But we're not looking to be a complete end-to-end data provider -- you're not going to see us in carrier-based routers and switches. We need to be a fit-for-purpose data provider. Unified communications and contact center is where we will focus our R&D investment. Those are our primary business. The data products complement that and enable it, but it doesn't mean I have to have all the point products in the data portfolio."

Services And Distributors Services

Abbott acknowledged that Nortel's and Avaya's services strategies were "very different," but he referenced the expanded VAR programs around services that Avaya put in place last fall.

Some of those programs -- one, for example, enables VARs to offer private-label managed services -- have given Avaya a new indirect services story that simply didn't exist at any substantial level in the past.

"A lot of Nortel partners have a traditional TPM- [third party maintenance] based services go-to-market," Abbott said. "But as you move to the IP world, it becomes much more of a self-serve, 1-800-Tech-Support software and support model where on-site services are less of a requirement. That's part of the challenge for us. But our message to partners is that we're not going to be competing with them. We need to collectively go to work. We have been planning to migrate around Avaya support, and unbundle what before was a very closed support model."

Abbott's message to Nortel VARs fearing their services margins will evaporate is, 'Don't be afraid.'

"Our new design points are very much partner-enabled," he insisted. "We'll take the managed services competencies that Nortel had and make sure they're in line with the tenet of our strategy, which is partner-enabled managed services. We don't want to be in the direct managed services business."


One of the big questions for Avaya is what it plans to do with the distributors -- especially Ingram Micro and Tech Data -- that have strong Nortel lines. Some tough decisions may await Avaya, which has been holding discussions with distributors on an ongoing basis and plans to disclose which relationships it will maintain by the end of March.

"We will spend the next two-and-a-half months studying our distribution coverage model and what it needs to look like three to four years out," Abbott said. "Obviously, there's some overlap, and that comes from the Nortel channel. Our design point is to make sure we don't over-cover the market while realizing that some of these distributors are quite strong from a multinational and global perspective. Our goal is much longer-term, higher-value distribution."

Of existing Avaya and/or Nortel distributors who will remain with Avaya going forward, Abbott confirmed only Westcon Group as a sure thing.

"It's not wise for me to even consider a move away from them. They're becoming our largest distributor," he said. "It would be impractical, which is not meant to be a backhanded compliment -- they're a real key asset."

Does the same hold true for other distributors?

"It's hard to say," Abbott continued. "Some of these products are not necessarily ready for broadline distribution. This is a high-value business. Having said that, there's still tremendous value in having those, and the breadth of coverage [broadline distributors] can offer is extremely important to us. I go into this process without preconceived notions. We're not going to string this thing along."

What about ScanSource's Catalyst Telecom, which does strong Avaya business?

"I think the answer is, 'Yes,'" Abbott said. "They have to do more internationally for us, and they're making moves to do that. Moving from distributor to distributor is a complex process, and given the complications of business, the last thing you want to do is make changes for your reseller who depends on a distributor."

Abbott suggested that VARs should continue to lean on their distributors for information, and also make use of Avaya call centers and Web resources for getting answers to Avaya-Nortel transition questions.

He extolled Avaya's ability to have completed the acquisition and come public with a product road map in a short time, and said Avaya will be announcing new products in the second quarter, as well as ongoing support for its newer partners.

"Because it was a bankrupt company, there's lots of planning that we were able to do ahead of time, and that's helped us be comprehensive," Abbott said.

As for Avaya, "What we've been doing since we went private is rewiring this company for speed. If you set the pace for execution in the industry, you typically win."

Avaya is scheduled to hold a conference call for media and analysts on the Nortel product integration at 11 a.m. EST, Tuesday, and a virtual conference at 1 p.m. EST, Tuesday. Watch this space for analysis and views from the channel throughout the week.

Mon, 18 Jan 2010 07:00:00 -0600 text/html
What Is a Call Option? How Do I Trade Calls?

A call option is a contract that gains value when the underlying stock rises.  In the most basic sense, then, a call option is a bet that the underlying security will rise in price, enabling you to profit from your investment. However, call options can also be combined with other types of option contracts to construct a number of different bullish, bearish, and directionally neutral trading strategies.

Sticking to the basics for now, a call option that's being used to speculate on higher prices for the underlying stock will be bought to open by a bullish trader. The purchase of this option gives the holder the right -- but not the obligation -- to buy 100 shares of that stock at the strike price, in the event the stock should rise above that strike prior to expiration.

The contract(s) are purchased for an initial upfront cost, known as the "premium." In a straightforward call-buying strategy, the premium paid to acquire a call option is also the maximum potential loss on the trade, should the stock fail to live up to bullish expectations.

A call option is "in the money" when the price of the underlying stock exceeds the strike price of the option. An in-the-money call can be exercised by the holder in order to acquire the shares at a discount to the current market price. Alternately, the contract can be sold to close before it expires, in which case the trader's profit would stem from the gain in the option's premium over the lifetime of the trade.

If an in-the-money call expires without being proactively exercised or sold to close, it may be exercised by the Options Clearing Corporation (OCC). This process is automatic for any options that are in the money by $0.01 or more, unless alternate instructions are provided by the option holder. Traders who do not want their in-the-money calls to be exercised upon expiration should discuss the available choices with their brokers.


Fri, 11 Sep 2020 07:15:00 -0500 en text/html
Women’s basketball: CU Buffs using break to get back to basics

Once the college basketball season starts, there aren’t many opportunities to step back and refocus on the basics.

The Colorado women’s basketball team is getting that chance, however, and hoping to take full advantage of it.

CU (9-1), which remained at No. 8 in the latest Associated Press Top 25 rankings on Monday, rolled past UT-Arlington Dec. 5 and won’t play again until Dec. 21 when Northern Colorado visits Boulder.

Rest was first on the agenda. Following the UTA game, CU took four of the next five days off. Coaches are using the time to recruit and players had chances to go home for a few days.

On the court, however, there is a need to re-embrace the fundamentals of the game.

“I just think we need to sort of reset back to the basics, especially on the defensive end of the floor,” CU head coach JR Payne said. “I’m watching possessions and we’re doing things that we don’t (normally) do, and we’re not doing things that we do – or we should be doing. I don’t know that any of it is really schematic. It’s more like we just need to get back to the basics and things like that. I think would really help us.”

The first 10 games were played in a four-week period, leaving little time for the basics. The Buffs were either playing or preparing for the next opponent.

Sometimes working on the fundamentals can be boring, but Payne paraphrased a quote she saw with the message about “elite players know that working on fundamentals is the key to success.”

As good as the season has been for CU to this point, there are times when the basics have been forgotten. With Pac-12 Conference play set to begin on Dec. 30, Payne and the staff want more focus on those areas.

“Ultimately, those are the things that help you win games,” she said.

Under Payne, CU has typically been good at focusing on itself in getting better, and that will certainly be emphasized during a stretch where the Buffs will play just once in 24 days.

“It’s very important,” she said. “It’s also very exciting for us, because we love to scout and we think we do a great job of that but I think we need to prioritize ourselves. Because like I said, when we were watching the film, we’re doing things that we shouldn’t be doing and we’re not doing things we should be doing. That means that we need more practice time to revisit fundamentals, revisit our jobs on the floor and make sure that we’re more disciplined in that.”

Individually, there are players who need to spend some time in the gym to get more shooting practice, Payne said, but “individual ownership” of what’s happening on the floor is the main priority.


The top 12 teams in the AP poll remained unchanged from last week. South Carolina is still at No. 1, receiving all 36 first-place votes. UCLA (No. 2), North Carolina State (No. 3), Iowa (No. 4) and Texas (No. 5) round out the top five, followed by USC, LSU, Colorado, Stanford and Baylor. In addition to the four teams in the top 10, the Pac-12 also has Utah at No. 11. Washington and Washington State are the top two teams among “others receiving votes,” while Oregon State also received a vote. 
 Utah’s Alissa Pili was named Pac-12 player of the week, while USC’s JuJu Watkins was the freshman of the week. Watkins has been the freshman of the week all five weeks of the season so far.

Mon, 11 Dec 2023 04:22:00 -0600 Brian Howell en-US text/html

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