Presented by: Charlie Comber

Bull spreads have become very popular in the trading industry.  With a low risk and high profit potential, you can make a serious cash flow daily, with only a few trades.

Bull spreads have built in floor and ceiling levels – You will always know your maximum potential loss and profit

Each pip that the price moves is equal to \$1

Example… You enter a Buy at 1.309 on the EUR/USD that has a spread of 1.297 – 1.397

The price rises 50 pips, leaving you with a profit of \$50 per contract

You purchased 5 contracts; therefore you profited \$250 on one trade

Stock Indicies

Forex

Commodities

Let’s take an example:

The EUR/USD may have an available Bull Spread that states:

EUR/USD 2.799 – 3.799 (3pm) –  The current price is at 2.900

What this means is:

Floor = 2.799

Ceiling = 3.799

Expiration of the contract(s) is 3pm

You have a potential profit of \$899 per contract

You have a potential loss of \$101 per contract

It is currently 1pm and you see from your strategy that the price is going to rise over the next few hours

At this point you would choose a Buy direction, since you believe the price will rise

The current price of the EUR/USD is at 2.900

You decide to purchase 7 contracts

Scenario #1 : The Price rises to 3.00 or 100 pips at the time of expiration (remember that each pip equals \$1)

This would leave you with \$700 profit in one trade

Scenario #2 : The Price decreases to 2.850 at the time of expiration – that is 50 pips or \$50 per contract

SL & TP

Remember – You can always exit a trade early to:

SL – Stop Loss

OR

TP – Take Profit

Let’s See A Few More Examples

US Tech 100 3590 – 3690 (4:15PM)

The floor equals 3590 and the ceiling is 3690

You believe that the price will be above 3604

The current price is at 3606

You would choose a Buy for the Direction

Choose the # of contracts or Size

Your max profit equals \$84 per contract

You max loss equals \$16 per contract

Crude Oil 95.00 – 100.00 (2:30PM)

The floor equals 95.00 and the ceiling is 100.00

You believe that the price will be above 95.48

The current price is at 95.48

You would choose a Buy for the Direction

Choose the # of contracts or Size

Your max profit equals \$452 per contract

You max loss equals \$48 per contract

US 500 1955.0 – 1965.0 (3PM)

The floor equals 1955.0 and the ceiling is 1965.0

You believe that the price will be below 1963.3

The current price is at 1963.2

You would choose a Sell for the Direction

Choose the # of contracts or Size

Your max profit equals \$82 per contract

You max loss equals \$18 per contract

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