Skip to content
We may earn a commission from links on this site. Trading involves substantial risk of loss — content is educational, not financial advice.

What is a vertical spread in options?

A vertical spread involves buying one option and selling another of the same type (both calls or both puts) with the same expiration but different strike prices. A bull call spread (buy lower strike call, sell higher strike call) profits when the stock rises. A bear put spread profits on declines. Vertical spreads reduce the cost of buying options outright while also capping maximum profit.