Vertical Spread
Also called: debit spread, credit spread option, bull call spread, bear put spread
A vertical spread buys one option and sells another of the same type and expiry at a different strike, capping both the cost and the payoff. A debit spread pays out if the move happens; a credit spread pays you upfront to bet it won't go too far. Verticals are the standard way to express a directional view cheaply, because the short leg funds much of the long leg — at the price of giving up everything beyond the second strike.
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