Glossary term
Vertical Spread
An options spread using the same expiry but different strikes; defines a fixed maximum gain and maximum loss.
A Vertical Spread is an options position using the same expiration but two different strike prices, one long and one short. It defines a fixed maximum gain and maximum loss at entry, making risk fully known. Credit verticals (selling the nearer strike) harvest premium with defined risk, while debit verticals pay upfront for directional exposure with capped upside. See Greeks 101.