Option Trading: Bull/Bear Spreads and Collars
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Option Trading: Bull/Bear Spreads and Collars

Intuition Publishing
Updated Sep 24, 2020

Bull spreads and bear spreads are options strategies designed to make the most of a moderate change in the underlying asset. The potential for large gains is limited, but the strategy also protects against large losses. We describe both spreads with the aid of an example, and finish with a comparison of bull and bear spreads to a collar strategy.