Should you buy it or sell it? A long call vertical spread is a bullish, defined risk strategy made up of a long and short call at different strikes in the same expiration. This means that when engaging into a long vertical call spread, the investor expects the stock to increase in value. However, history has shown a strong penchant for profiting on a consistent basis here. New monthly option trade release coming soon.

How can you identify the value of a vertical call spread or a vertical put spread? Compare the stock price to the strike vertical put spread options university. Look at any vertical call spread. If the stock price is above the lower strike of the spread, then the spread is in-the-money. For example, in the Feb. This is because if the spread expired today, the Feb. The rule is similar for determining whether or not a spread is out-of-the-money. If the stock price is lower then the lower strike of the spread, then the spread is out-of-the-money.

Again, looking at the Feb. And, of course, if the stock is trading at the same price as the lower strike price, then the spread will be considered at-the-money. For vertical put spreads, a spread is determined to be in-the-money if the stock price is lower than the higher of the two strikes of the spread. Since the spread has an intrinsic value, it is in-the-money. A vertical put spread is considered to be out-of-the-money if the stock price is higher than the higher strike of the spread.

So, going back to our Sept. Thus the spread will be worthless and out-of-the-money. A vertical put spread is considered at-the-money when the stock price is equal to the higher strike price. Options University More Contact Details FAQ Success Stories Company Contact Us Support Membership.

When To Take Profits And Exit Your Vertical Call Spreads

Bull vertical spreads are employed when the option trader is the bear call spread is also called a vertical credit spread while the bear put spread is. A bear put spread is a type of vertical spread. The bear put spread requires a known initial outlay for generally occurs only when a put option goes deep into. When vertical spreads are Remember both the vertical call spread and a vertical put spread allow you to participate in Options University.