Both call spread and put spread are option strategies where investor buys and sells equal number of both the options to earn profit.
https://efinancemanagement.com/derivatives/call-vs-put-spread
3. Meaning
Both call spread and put spread are option strategies where investor buys and sells equal number of both the options to
earn profit.
1. Call Spread
Here, investor buys a call and also sells a call with same expiry but at a higher strike price.
2. Put Spread
In case of put spread, an investor buy a put and sells a put of same expiry but at a lower strike price.
4. Types of Call Spread
Types of call spread are listed below:
1. Vertical Call Spread
In vertical call spread, calls have same expiry but varying strike prices.
There are 2 types of vertical call spread:
a) Bull vertical call spread
b) Bear vertical call spread
2. Calendar Call Spread
Here, investor buys a long term call option and sells a near term call option with same expiry.
These are further classified into:
a) Neutral Calendar Call Spread
b) Bull Calendar Call Spread
3. Diagonal Call Spread
In this, investor buys long term call option & sells near term call option having more strike price.
5. Types of Put Spread
Types of put spread are listed below:
1. Vertical Put Spread
In vertical put spread, puts have same expiry but varying strike prices.
There are 2 types of vertical call spread:
a) Bull vertical put spread
b) Bear vertical put spread
2. Calendar Put Spread
Here, investor buys a long term put option and sells a near term put option with same expiry.
These are further classified into:
a) Neutral calendar put spread
b) Bull calendar call spread
3. Diagonal Put Spread
In this, investor buys long term put option & sells near term put option having more strike price.
6. Reference
To know more about it, click on the link given below:
https://efinancemanagement.com/derivatives/call-vs-put-spread