This article was originally published in The Option Strategist Newsletter Volume 3, No. 23 on December 8, 1994.
Traders sometimes use bull spreads instead of actually buying calls when they want to hedge their bets somewhat. In this article, we'll take a look at how the bull spread works, and perhaps shed some light on the somewhat unusual characteristics of its profit potential as time passes.
This article was originally published in The Option Strategist Newsletter Volume 4, No. 8 on April 27, 1995.
Since we are currently recommending a "backspread" strategy in OEX options (and have been for a while), we though it might be beneficial to define and review the strategy for subscribers who are not familiar with the term.
