Bull Vertical Spread

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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.

INVESTOPEDIA EXPLAINS '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. Bear Spread

    1. An option strategy seeking maximum profit when the price of ...
  2. Bear

    An investor who believes that a particular security or market ...
  3. Spread

    1. The difference between the bid and the ask price of a security ...
  4. Vertical Spread

    An options trading strategy with which a trader makes a simultaneous ...
  5. Expiration Date (Derivatives)

    The last day that an options or futures contract is valid. When ...
  6. Bull

    An investor who thinks the market, a specific security or an ...
RELATED FAQS
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  2. How can an investor profit from the cyclical nature of the electronics sector?

    An investor can profit from the cyclical nature of the electronics sector in two ways. He can employ sector rotation, shifting ... Read Full Answer >>
  3. What does negative vega mean for credit spreads?

    Greek vega measures an option's sensitivity with respect to a change in the underlying asset's volatility. The vega of an ... Read Full Answer >>
  4. What options strategies are best suited for investing in the banking sector?

    The covered call option strategy allows investors to profit from the banking sector's stability and its track record for ... Read Full Answer >>
  5. What options strategies are best suited for investing in the drugs sector?

    The covered call and long straddle options strategies enable investors to capitalize on the unique characteristics of the ... Read Full Answer >>
  6. What's the difference between a credit spread and a debt spread?

    When trading or investing in options, there are two main option spread strategies, credit spreads and debit spreads. Credit ... Read Full Answer >>
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