bear-spread

A vertical spread trade takes a position in two or more options of the same type (i.e., two or more calls, or two or more puts). Both the bull and bear spread are capped on the upside. The BULL SPREAD buys a call with a lower strike price partially funds the purchase by writing (ie, selling) a...

Learning objectives: Explain the motivation to initiate a covered call or a protective put strategy. Describe the use and calculate the payoffs of various spread strategies. Questions: 727.1. Assume the current price of a stock is $30.00 and imagine that we can only trade the following four...