To The Moon

For traders who have a clear view of market direction but don’t want to take on too much risk, the vertical spread is a smart options strategy.

It lowers costs and manages risk—but there are still key points to keep in mind to make sure everything goes smoothly.

This chapter from The Options Handbook highlights 9 essentials about vertical spreads! (Don’t miss the mini challenge at the end! 🎁)

▶ When to Use Vertical Spreads

• Limited Funds, But Want to Trade Options: Vertical spreads cost less than buying options outright.

• You Have a Market View, But Aren't Sure About Volatility: Even if the stock doesn't move much, you can still profit.

• High Implied Volatility (IV): When buying options is too expensive, spreads help lower your outlay.

▶ 3 Key Features

• Profit Is Capped: Unlike buying a single option, where your upside is unlimited, spreads have a maximum profit.

• A Bit More Complex: You need to trade two options at once. It's best to use a broker that lets you execute both orders in one action at the same time.

• Early Assignment Risk: If the option you sold goes in-the-money, you could be assigned early. If you don't have enough margin, the other leg might be force-closed, so manage your position size carefully.

▶ 3 Trading Must-Knows

• Pick the Right Strikes: Don't set your strikes too far apart, or your risk and reward may not be balanced.

• Watch Liquidity: Stick to options with good trading volume to avoid big bid-ask spreads.

• Manage Position Size: Although risk is capped, allocate your capital wisely according to your account size.

🎉[Mini Events]🎉

How to Join

• Flip to Chapter 5 of the book and find the section about Vertical Spreads.

• Snap a photo and post it in the comments along with your own short insight! 📸

• No book? No problem—just share your thoughts on this article and you’re in!

Example: “Vertical spreads are a go-to strategy here. Perfect for scooping up premium when the market is just going sideways.” 📸

Prizes

• 🎁Participation Reward: 10 Tiger Coins for every valid comment.

• 🎓Learning Star: Participants who leave insightful comments will receive a free copy of The Options Handbook! (Already got the book? The prize will be an Options Learning Notebook instead.)

Event Period

• 📅 from now on → Sep 19, 2025

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