By Mike Parnos of Online Trading Academy*
Today, we'll explore vertical spreads. Basically, a vertical option spread is the purchase of one option and the sale of another with both options having the same expiration month. It is a directional strategy, and a vertical spread can be done with either puts or calls, depending on your opinion of where the stock will move.
If you're using calls, and you would be if you are bullish, this particular vertical spread is called a "bull call spread." By the same token, if you are bearish, you can use puts to create a vertical "bear put spread."
