Buying Vertical Spreads on ThinkorSwim Web | TOS Web Tutorial
Today we’ll be discussing long vertical spreads and how to trade them within the thinkorswim web app. We’ll start by learning what they are, how they work, and how to manage them throughout the life of the trade.
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A long put vertical spread is a bearish, defined-risk strategy made up of a short and long put at different strikes in the same expiration cycle. The strike price of the long put is higher than the short put and the value of a long put vertical spread will increase when there's a drop in the underlying asset's price.
A long call vertical spread is a bullish, defined-risk strategy made up of a long and short call on the same underlying asset within the same expiration cycle, but at different strikes.
Timestamps
0:00 Intro to verticals
1:13 Option chain explained
3:11 Buying a vertical call spread
8:16 Cancel or edit working order
10:48 Best practices
11:03 Choosing an expiration
11:37 Choosing strike prices
12:10 When to close the vertical
13:39 Buying a vertical put spread
15:17 Attaching a profit taking order
16:56 Outro
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