Vertical Spread


DEFINITION of 'Vertical Spread'

An options trading strategy with which a trader makes a simultaneous purchase and sale of two options of the same type that have the same expiration dates but different strike prices.

BREAKING DOWN 'Vertical Spread'

Profits are determined by the widening or narrowing of the difference between the option premiums on the two positions.

  1. Option

    A financial derivative that represents a contract sold by one ...
  2. Horizontal Spread

    An options strategy involving the simultaneous purchase and sale ...
  3. Bear Spread

    1. An option strategy seeking maximum profit when the price of ...
  4. Bull Call Spread

    An options strategy that involves purchasing call options at ...
  5. Bull Spread

    An option strategy in which maximum profit is attained if the ...
  6. Expiration Date (Derivatives)

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