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Bear Vertical Spread

Posted by Svetlana Tokunova
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A strategy employed when an investor expects a decline in a commodity price but at the same time seeks to limit the potential loss if this expectation is not realized. This spread requires the simultaneous purchase and sale of options of the same class and expiration date but with different strike prices. For example, if call options are spread, the purchased option must have a higher exercise price than the option that is sold.

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