What does Vertical Spread mean?
A vertical spread is made up of a short option and a long option at different strike prices in the same expiration cycle for the same underlying assets. In the vertical spread options trading strategy, a trader makes a simultaneous purchase and sale of two options of the same type that have the same expiration dates but different strike prices.
Futures Knowledge Explains Vertical Spread
Suppose you are optimistic about the ABC Corporation and expect the price to go up in near future. You buy the ABC Corporation June $150 call and simultaneously sell the ABC Corporation June $160 call at market. This is an example of $150/$160 Vertical Call Spread.