Advantages of vertical spreads over longs: The spreads will have a closer break even and will cost less. They will pay better than longs until the move in the underlying gets bigger. If the spreads cost 1/2 as much as the longs, you can put on twice as many of the spreads, in which case they will out perform the longs in anything other than an extreme move.
The cons: inclusion of any short options means there is a margin requirement. The 10-lot vert shown above eats $4k in margin.
Not gonna harp on this though, money. You do you.
The cons: inclusion of any short options means there is a margin requirement. The 10-lot vert shown above eats $4k in margin.
Not gonna harp on this though, money. You do you.
"If The Fool persists in his Folly he will become wise." - William Blake