What are the different types of vertical spreads?
Vertical spreads in Singapore are a great way to take advantage of market fluctuations. Investors can buy and sell the same underlying asset at different prices using vertical spreads. This strategy helps to minimise risk while allowing them to maximise their chances should their predictions regarding future market movements prove correct. This article will discuss different types of vertical spreads that traders can utilise in Singapore.
Bull call spread
A bull call spread is an option spread strategy which involves buying calls at one strike price and selling higher strike calls against it. The objective of this type of spread is for the stock price to rise above the sold call’s strike price, resulting in a net return from the spread. This limits maximum potential gains and losses, as the maximum gain equals the difference between the two strike prices minus the net debit taken to enter the spread.