Options Wonderland

[leemalone2k3]

No, if you are bullish you buy the call at support like normal. Then when the stock rallies and looks like it may pullback you sell a call the next strike up. As the stock retraces, you then cover the call you sold taking in a profit on the short side, and keep the long call.


You can do the same with puts. if you are bullish the put spread should bring premium into your account.

The great thing about verticals is you can be bullish with calls and puts spreads or bearish with calls and puts spreads. A bull vertical call spread will create a debit to your account and a bull vertical put spread creates a credit to your account. A bear call spread creates a credit and a bear put spread creates a debit.

This may help you understand a little better
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=27853473