Vertical Option Spread Trading Pros and Cons - Bottom Line
- Written by Carley Garner
The Bottom Line on Vertical Option Spreads
Those trading outright calls and puts, will typically see much quicker profits and losses. They will also have the ability to trade in and out of positions more proactively than a vertical spread trader would. In summary, vertical spreads are a better “buy and hold” strategy for option traders while outright options are better suited for swing traders. Don’t fall into the fallacy that any type of strategy can be applied in all circumstances; there is a time and place for everything.
*There is substantial risk of loss in trading futures and options; it is not suitable for everyone.
Carley Garner is the Senior Strategist for DeCarley Trading, a division of Zaner, where she also works as a broker. She authors widely distributed e-newsletters; for your free subscription visit www.DeCarleyTrading.com. Her books, "A Trader's First Book on Commodities," "Currency Trading in the FOREX and Futures Markets," and "Commodity Options," were published by FT Press.