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Types of Spread In Option Trading

 

There are two main types of spread. Vertical spread is one type and is more popular than the horizontal spread. Vertical spreads involve buying a call at a given premium, but selling another call at a higher premium.

 

The definition of horizontal strike according to Investopedia.com is: "An options strategy involving the simultaneous purchase and sale of two options of the same type, having the same strike price, but different expiration dates." This strategy is practiced a lot less frequently because it is more complex than the vertical spread option strategy.

 

 

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