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Personally, I find that it's important to have a clear understanding of the market conditions and trend before selecting the best strike prices for the spread.![]()
For example, in a bullish market, I might use a bull call spread by purchasing a call option with a lower strike price and simultaneously selling a call option with a higher strike price. This allows me to limit my potential losses while still benefiting from upward moves in the stock price.
e.g.To creat...
For example, in a bullish market, I might use a bull call spread by purchasing a call option with a lower strike price and simultaneously selling a call option with a higher strike price. This allows me to limit my potential losses while still benefiting from upward moves in the stock price.
e.g.To creat...
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By simultaneously buying and selling options contracts with different strike prices, the vertical spread strategy helps limit losses and control risk. The purchased options provide potential for protection or profit, while the sold options generate income that offsets the cost of the purchased contracts.
So, how does it demonstrate its advantages compared to other strategies?![]()
Limited loss: In contrast to s...
So, how does it demonstrate its advantages compared to other strategies?
Limited loss: In contrast to s...
I can share an example of how I used the vertical spread strategy in options trading to generate profits. Let's say, at a certain point, I had a bullish view on a particular stock, but I also wanted to trade with controlled risk.
I chose the vertical spread strategy, specifically the Credit Vertical Spread. I simultaneously sold a higher strike price call option (referred to as the "far" option) and bought a lower strike price call option (referred to as the "near" option). B...
I chose the vertical spread strategy, specifically the Credit Vertical Spread. I simultaneously sold a higher strike price call option (referred to as the "far" option) and bought a lower strike price call option (referred to as the "near" option). B...
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Transaction on 3 options trade so far all losing money as did nothing until expiry date. So fast need learn new strategy again. #Trading with Vertical Spreads
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Vertical spreads are a popular options trading strategy because they offer limited risk and limited potential profit. When using a vertical spread, we buy one option at a certain strike price and simultaneously sell another option at a different strike price, but with the same expiration date. The difference between the strike prices is known as the "spread."
There are two types of vertical spreads: bull call spreads and bear put spreads. A bull c...
There are two types of vertical spreads: bull call spreads and bear put spreads. A bull c...
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Now that $Tesla (TSLA.US)$ is at 193, let's say you believe that TSLA will increase moderately in the near future. Here's how you could use a bull call spread to potentially profit from this move:
Buy a TSLA call option with a lower strike price. For example, you could purchase a TSLA call option with a strike price of $200 that expires in 30 days for $2 per contract.
Sell a TSLA call option with a higher strike price. For instance, you could sell a TSLA call option with a strike price of $225...
Buy a TSLA call option with a lower strike price. For example, you could purchase a TSLA call option with a strike price of $200 that expires in 30 days for $2 per contract.
Sell a TSLA call option with a higher strike price. For instance, you could sell a TSLA call option with a strike price of $225...
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If you are into options or are new to options, do check out the Explained Simply option tutorial series that I made. It is a detailed and simplified way of explaining options.
A vertical spread is a common options trading strategy that involves buying and selling options of the same type (either both CALL options or both PUT options) on the same stock with the same expiration date, but at different strike prices. It gets its name from the way the op...
A vertical spread is a common options trading strategy that involves buying and selling options of the same type (either both CALL options or both PUT options) on the same stock with the same expiration date, but at different strike prices. It gets its name from the way the op...
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$Abercrombie & Fitch (ANF.US)$
Here is a little example of the power options can hold. This AM, after ANF’s earnings, I noticed a strong uptrend began & bought a couple of $31 strike point call options. 600% jumo 300% profiit.
The best opportunity for biggest gains with options is usually following quarter...
Here is a little example of the power options can hold. This AM, after ANF’s earnings, I noticed a strong uptrend began & bought a couple of $31 strike point call options. 600% jumo 300% profiit.
The best opportunity for biggest gains with options is usually following quarter...
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Everyone has different interests and needs when it comes to trading options. Please take a moment to review the list of possible options-related topics below and let us know which ones you care about (select all that applied). In addition to the topics in the vote, if there are any other options-related topics that you would like to discuss, please feel free to suggest them in the comments section. ![]()
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How to cast your vote?
1. Vote dire...
1. Vote dire...
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No.1: Basic options trading strategies (e.g., buying calls or puts, selling covered calls, vertical spreads)