Bull Vertical Spread

DEFINITION of 'Bull Vertical Spread'

An bullish strategy used by investors who feel that the market price of a commodity will appreciate but wish to limit the downside potential associated with an incorrect prediction.

BREAKING DOWN 'Bull Vertical Spread'

A bull vertical spread requires the simultaneous purchase and sale of options with different strike prices, but of the same class and expiration date.

RELATED TERMS
  1. Vertical Spread

    An options trading strategy with which a trader makes a simultaneous ...
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RELATED FAQS
  1. How do I set a strike price in an options spread?

    Find out more about option spread strategies, and how to set the strike prices for bull call spreads and bull put spreads ... Read Answer >>
  2. What options strategies are best suited for investing in the utilities sector?

    Learn about option strategies investors can use to take a position in the utility sector, including covered calls and option ... Read Answer >>
  3. How does the option work if both calls in the vertical call are in the money?

     Do I have to have the capital to buy 100 shares of that stock in order to make a profit or could I just get the difference? ... Read Answer >>
  4. What is spread hedging?

    Learn about one of the most common risk-management strategies options traders use, called spread hedging, to limit exposure ... Read Answer >>
  5. What options strategies are best for investing in the industrial sector?

    Learn a couple of popular options trading strategies that can be used by investors seeking to enhance their profits from ... Read Answer >>
  6. Do options make more sense during bull or bear markets?

    Understand how options may be used in both bullish and bearish markets, and learn the basics of options pricing and certain ... Read Answer >>
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