Question
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which type of spread is profitable?
4 Answers
<p>A bullish vertical spread might earn you profits when the underlying price rises; whereas bearish vertical spread would earn profit when it falls.</p>
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<p>Try using a bullish call spread when calls are expensive due to elevated volatility, and you may expect moderate upside rather than huge gains. And, use a bear call spread when volatility is high and a modest downside is expected.</p>
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<p>You can use a bull put spread to earn premium income in sideways to marginally higher markets, or to buy stocks at reduced prices when markets are choppy.</p>
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<p><br>Just use a bear put spread when you expect a moderate to significant downside in a stock or index and volatility is rising. Bear put spreads are also considered during periods of low volatility to reduce the dollar amounts of premiums paid, such as to hedge long positions after a strong bull market.</p>
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