A bear put spread is a fundamental bearish spread in options trading, composed of two put options with different strike prices that expire in the same month, where a “HIGHER” put strike is purchased and a “LOWER” put strike is sold, simultaneously.  Think of the basic definition of...

A bull put spread functions in the same manner as a bull call spread, except that put options are used rather than calls options to initiate the trade.  In a bull put spread, a “LOWER” put strike is purchased and a “HIGHER” put strike is sold, simultaneously. The risk profile of a...

A BEAR CALL SPREAD (short call spread) is a fundamental bearish spread in options trading, composed of two call options with different strike prices that expire in the same month, where a HIGHER call strike is purchased and a LOWER call strike is sold, simultaneously.  By combining a long call option...

A bull call spread is a fundamental bullish spread in options trading, composed of two call options with different strike prices that expire in the same month, where a “LOWER” call strike is purchased and a “HIGHER” call strike is sold, simultaneously.  Think of the basic definition...

In the basic strategies section, we covered the 4 basic option trading techniques and amongst the four were two strategies (short call and short put) that had unlimited risk exposure.  In addition, you may have also realized that buying call or put options can get very expensive, especially if they expire...