Vertical spread

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In options trading, a vertical spread is an options strategy involving buying and selling of multiple options of the same underlying security, same expiration date, but at different strike prices. They can be created with either all calls or all puts.

[edit] Bull Vertical Spread

Bull call spread and bull put spread are bullish vertical spreads constructed using calls and puts respectively.

[edit] Bear Vertical Spread

Bear call spread and bear put spread are bearish vertical spreads constructed using calls and puts respectively.

[edit] References

• McMillan, Lawrence G. (2002). Options as a Strategic Investment, 4th ed., New York : New York Institute of Finance. ISBN 0-7352-0197-8. 

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