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which type of spread is profitable?
5 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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<p id="isPasted">In 2026, profitability depends less on the type of spread and more on how well that spread aligns with your specific trading strategy and market conditions. </p><p><strong>1. Tight Spreads: The "Profit Accelerator" </strong></p><p>In general, narrow (tight) spreads are the most profitable for the majority of retail traders because they lower the "breakeven point."</p><ul><li>Why they are profitable: Every trade starts at a slight loss equal to the spread. A tight spread (e.g., 0.1 to 1.1 pips on EUR/USD) means the market needs to move very little in your favour for you to begin seeing a profit.</li><li>Best for: Scalpers and …</li></ul>
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