Vertical Call Spreads

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  • Author
    AJ Monte
  • Level
    STU 300 Level
  • Video time
    30-60 minutes

Course Description

In this course, AJ covers how to place a Vertical Call Spread which involves the simultaneous buying and selling of Call Option contracts with the same Expiration Date, but at different strike prices.  

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Here is what we will cover in this course

When & How to Spread

Traders will use a vertical spread when they expect a moderate move in the price of the underlying asset. Vertical spreads are mainly directional plays and can be tailored to reflect the trader's view, bearish or bullish, on the underlying asset.

Trading an Up Market

When the market goes up, the long call will make money for you. When the market goes up and you're short a call, that short side loses money. One offsets the other.  The difference between those two options and the way they move is going to be very heavily reliant upon the delta.

Trading a Down Market

In the down market, the call option that you buy will go down in value. But the short side will offset the loss on the long side, which gives you a teeter-totter effect with these options.

About AJ Monte

AJ Monte is StickyTrades.com Chief Technical Analyst
He is a chartered market technician with over 40 years of experience as a market analyst. He travels the world teaching innovative techniques for accumulating wealth using solid risk management strategies. AJ has also appeared on Fox Business, ABC television, and was co-host for the prime time show on PBS television, 'Wealth & Wisdom'.
Accomplishments Include:
  • Member of the Market Technicians Association
  • Former Chairman of Options Floor Trading Committee and 10 year member of COMEX
  • Author of 2 best selling books:
    "Take Charge of your Money Now"
      "The Market Guys 5 Points for Trading Success"
  • Regular Guest Speaker for Tony Robbins Wealth Mastery & T. Harv Ecker’s NWA seminar series.
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