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In options trading, a bull spread is a bullish, vertical spread options strategy that is designed to profit from a moderate rise in the price of the underlying security. Because of put–call parity , a bull spread can be constructed using either put options or call options .
A short put ladder is also called a bull put ladder. [9] A ladder can be seen as a modification of a bull spread or a bear spread with an additional option: for instance, a bear call ladder is equivalent to a bear call spread with an additional long call. A bull put ladder is equivalent to a bull put spread with an additional long put.
Many options strategies are built around spreads and combinations of spreads. For example, a bull put spread is basically a bull spread that is also a credit spread while the iron butterfly can be broken down into a combination of a bull put spread and a bear call spread.
A bull call spread is an options strategy that sounds difficult but isn't so tough once you break it down. "Bull" comes from the fact that the position makes its maximum profit if the stock price ...
Buying a call option. Buying a put option. Type of bet. Bullish. Bearish. Breakeven price. Strike price plus premium. Strike price minus premium. Right. Right to buy at strike price
Vertical spreads can sometimes approximate binary options, and can be produced using vanilla options. Bull vertical spread - Bull call spread and bull put spread are bullish vertical spreads constructed using calls and puts respectively.
Moderately bullish options traders usually set a target price for the bull run and utilize bull spreads to reduce cost. (It does not reduce risk because the options can still expire worthless.) While maximum profit is capped for these strategies, they usually cost less to employ for a given nominal amount of exposure.
The calendar call spread (see calendar spread) is a bullish strategy and consists of selling a call option with a shorter expiration against a purchased call option with an expiration further out in time. The calendar call spread is basically a leveraged version of the covered call (see above), but purchasing long call options instead of ...
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