125: What the Books Don’t Teach About Vertical Spreads

Stock Market Options Trading

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In this episode, I discuss something about vertical spreads that options education books typically don't include. We'll explore comparing buying a single call option vs. buying a long call spread aka. bull put spread through the lens of trading strategy.

The primary point is that there is a level of consistency with vertical spreads over single options in that the cost of the spread is relatively the same over time whereas the cost of the call can vary due to volatility. This can make it harder to allocate a consistent amount of capital to a strategy.

The downside with vertical debit spreads of course is that you gaining consistency but at the cost of capping your upside gains if the market moves heavily in your favor.

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Disclaimer: This podcast is for informational and educational purposes only and should not be considered financial advice.