A vertical spread is an options strategy in which the trader simultaneously purchases and sells multiple contracts with different strike prices. Each buy or sell, known as a “leg,” is designed to secure bullish or bearish market exposure. Bullish vertical spreads profit when prices of the underlying assets rise, and bearish spreads profit when prices… Read more.
Butterfly spread strategies give traders powerful ways to engage the futures and options markets. Featuring applications for trading both bullish and bearish opinions, these types of spreads are ideal for limiting risk while pursuing nearly any financial goal. However, be forewarned―the market doesn’t hand out free lunches, and spread trading is no exception.