The Vertical Credit Spread is a vertical spread whereby a net credit is received when entering the position. A bullish Vertical Credit Spread can be constructed using put options and is known as the Bull Put Spread. A bearish Vertical Credit Spread can be created using call options and is known as the Bear Call Spread.
Vertical Debit Spread
Vertical spreads can also be entered on a debit. See Vertical Debit Spread.
Scope of the risk estimate
This page describes a family of positions or a hedge. Exact profit, loss and breakeven depend on the specified legs, valuation date, contract terms and any underlying portfolio. A portfolio hedge also depends on basis and correlation; protection is not guaranteed. Do not infer an exact payoff or a risk-free arbitrage from the strategy name alone.
