Spread betting, also called financial spread trading is a commission-free platform which allows the trader to speculate on numerous market movements, which in turn can be used to profit via bullish, bearish as well as neutral conditions. There are numerous strategies which one can use to profit; profits can be made from the rise and fall of the market movements.
One such platform for spread trader may be within stocks and shares options market. These options are available as puts or calls. A call option allows the trader place their wager on the stock at a set price which is termed the strike price; a put option will give the trader the right to sell the underlying stock at a specific price.
Bullish Market
This is where the trader believes the underlying market prices are going to rise.
Bearish Market
This is where the trader believes the underlying market prices are going to decline.
Bull Call Spread
This is where trader will make a bull call spread, established by purchasing call options on shares or stocks at one set strike price and then in turn selling the same number at a higher price. The trader will profit when the underlying share price exceeds the higher strike price prior to the expiration date.
Bull Put Spread
This is where the trader will use put options to profit from a rising stock or share price. The trader will create their spread by selling their put options at a set strike price and then buying the same amount of put contracts. Profit is made when underlying shares or stocks are above the higher price at the time of expiration. The trader will receive a credit into their account.
Bear Put Spread
This spread is actually the same as bull call spread with the exception the trader speculates the underlying stock or share price will fall. The trader will buy put options at one set strike rate and then in turn selling the same number at a lower strike price. The trader will profit when the underlying share spread reaches its maximum profit when the share price drops below the lower strike price prior to its expiration date.
Bear Call Spread
This spread type is actually a credit spread that allows the trader to profit when the underlying stock decreases in price. The spread is established by selling call contracts at one strike price and buying an equal number of calls at a higher strike price. If the stock is below the lower price at the time of expiration date, the trader will make profit by a credit to their account.
One such platform for spread trader may be within stocks and shares options market. These options are available as puts or calls. A call option allows the trader place their wager on the stock at a set price which is termed the strike price; a put option will give the trader the right to sell the underlying stock at a specific price.
Bullish Market
This is where the trader believes the underlying market prices are going to rise.
Bearish Market
This is where the trader believes the underlying market prices are going to decline.
Bull Call Spread
This is where trader will make a bull call spread, established by purchasing call options on shares or stocks at one set strike price and then in turn selling the same number at a higher price. The trader will profit when the underlying share price exceeds the higher strike price prior to the expiration date.
Bull Put Spread
This is where the trader will use put options to profit from a rising stock or share price. The trader will create their spread by selling their put options at a set strike price and then buying the same amount of put contracts. Profit is made when underlying shares or stocks are above the higher price at the time of expiration. The trader will receive a credit into their account.
Bear Put Spread
This spread is actually the same as bull call spread with the exception the trader speculates the underlying stock or share price will fall. The trader will buy put options at one set strike rate and then in turn selling the same number at a lower strike price. The trader will profit when the underlying share spread reaches its maximum profit when the share price drops below the lower strike price prior to its expiration date.
Bear Call Spread
This spread type is actually a credit spread that allows the trader to profit when the underlying stock decreases in price. The spread is established by selling call contracts at one strike price and buying an equal number of calls at a higher strike price. If the stock is below the lower price at the time of expiration date, the trader will make profit by a credit to their account.
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