How to Create a Vertical Options Spread with tradeMONSTER

Creating a vertical spread has never been so easy. Let the tradeMONSTER platform do the work for you. Everything from pairing up strikes to calculating the bid and the ask. All that remains is for you is to do your homework, make adjustments and enter the trade.

Watch this short YouTube Video for the steps necessary to create a vertical spread on the tradeMONSTER trading platform.

Welcome to tradeMONSTER.com video trading podcast.  This is Episode 13, “Creating a Vertical Spread”, presented by tradeMONSTER’s own Travis McGhee.  In this video I am going to show you a quick and easy way to create an option vertical spread using the tradeMONSTER trading platform.  You can see that I am currently quoting IBM here and I have both  calls and puts being individually quoted.  I am going to go to the top upper left hand corner.  I am going to left click on my dropdown where it says call/put.  And what the computer is going to do is that it will automatically create both a vertical, as well as a quote associated with that vertical for you.  Down the center where it says strikes you can see that I now have a 120/125, 125/130, 130/135 and so on and so forth. Now these are all vertical spreads created for the month of July 2010. Now there are 2 ways we can go about manually adjusting this.  If you are not necessarily happy with a 1 strike spread you can go to the top where it says Width, click on the drop down and change it to 2 strikes, 3 strikes or customized. Another way to go about it is let’s say for example that you wanted to purchase the 130/135 call vertical. You can hover over the quote and left click and it will direct you to your action screen. From here you can actually add or edit your legs manually. So I want to click on add/edit legs.  And it brings me to a new screen where I can change the 135 to 130 if I wanted to.  And I could drop this down to 125 if I wanted to. I could even change this back to 135 and have a 2 strike spread.  Whatever the case may be.  You can also change the expiry month and  quantity from this screen, analyze it and then go on and create your order if necessary.  The same holds true for the put side.  Let’s say for example you wanted to sell the 125/130 put vertical. Hover over the quote and left click.  You are comfortable with the strikes you have in place here.  Click sell.  And it creates your order ticket for you.  And that is how you go about creating an option vertical spread on the tradeMONSTER trading platform.  Go to tradeMONSTER.com to get access to all of our tools and educational resources for proactive investors like you. Every brokerage account gets free access to our paper trading practice platform!

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