both expiring at the same time. The strike price of the short call, represented by point B, is higher than the strike of the long call, point A, which means this strategy will always require the investor to pay for the trade
Options traders looking to take advantage of a rising stock price while managing risk may want to consider a spread strategy: the bull call spread. This strategy involves buying one call option while simultaneously selling another. Let's take a closer look. Understanding the bull call spread ...
Trader #1 decides to purchase a long call while Trader #2 decides to establish a bull call spread. Let's start by evaluating Trader #1's long call strategy using some common strategy attributes and options Greeks, such as Delta, Theta and Vega. Then we will perform the same assessment on...
By multi-leg strategies, we mean the strategy that has more than 2 option transactions. When the trader has an outlook of moderate bullish on a stock or an index, then the spread strategy like Bull Call Spread can be implemented.
The Bull Put Spread is your ideal solution! A Bull Put Spread is a bullish option strategy that works in the same way a Bull Call Spread does, profiting when the underlying stock rises. The Bull Put Spread is simply a naked Put write which minimizes margin requirement and limits ...
A Deep Dive into an Advanced Options Strategy In Video 16 of the Professional Options Trading Masterclass series, the instructor introduces the short bull ratio spread—a strategy designed to profit from an anticipated, significant upward move in a security while mitigating upfront costs. This sessi...
Bull Call Spread This strategy is used when the outlook of the trader on the stock/index is ‘moderately bullish’ and not very ‘aggressive.’ As the name suggests, it uses call options. In this, a trader buys a call option at a lower strike price – at At The Money (ATM) and sel...
The bull put spread strategy succeeds when the price of the underlying moves or stays above the higher strike price.2The result is the sold option expires worthless. The reason it expires worthless is that no one would want to exercise it and sell their shares at the strike price if it's...
A bull spread strategy consists of purchasing a near- or at-the-money option, followed by selling a higher strike price out-of-the money option in order to reduce the overall cost of the spreading strategy. The strategy is highly profitable when the price of the underlying primitive reaches ...
A bull call spread is cheaper than buying only an individual call option The bullish call spread limits the maximum loss of owning an asset to the net cost of the strategy Cons The investor forfeits any gains in the asset’s price above the strike of the sold call option ...