Bull Spread

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DEFINITION

An option strategy in which maximum profit is attained if the underlying security rises in price. Either calls or puts can be used. The lower strike price is purchased and the higher strike price is sold. The options have the same expiration date.

INVESTOPEDIA EXPLAINS

You make a lot of money if the stock rises. You lose it all if it doesn't. It's one of those higher risk maneuvers that can cause a lot of anxiety.


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