I just placed my first options trade, so I'm eager to see how it works out.

I placed a BULL SPREAD on some May 2001 PPD Call Options.

For those that don't know, a BULL SPREAD is where you buy options AND sell options, where the options are on the same security, at the same date in the future, but the strike price for the one you buy is lower than the strike price for the one you sell.

To be specific, I traded call options for May 2001 in PPD at a strike price of 40 and 45.

That means that if at May 2001, the share price of PPD is below 40, both are worthless and I lose all the money I paid.

If however PPD is above 45, then what happens is:
- On the option I bought, I make $5 + the excess over $45
- On the option I sold, I lose the excess over $45

So that means my MAXIMUM PROFIT is $5 (well, really it's $5 x 100 x the number of option contracts I buy, as each contract represents 100 shares)

My question to the experienced option traders out there is -- If PPD share price goes up quickly so both options are in the money, should I trade out of the position early, or hold until expiry? Or what do you think should determine that?

Regards,

Thomas.