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Published On: Mon, Apr 8th, 2013

Bull Put Spread

An options strategy used when investors expect a moderate rise in the price of the underlying asset and is most often a vertical spread.

Investors purchase put options at a certain strike price while also selling the equivalent number of put options at a higher strike price. This strategy’s goal is for the investor to keep the premium when the price of the underlying asset stays above the higher strike price, which causes the short option to expire valueless.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.

 

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