How to Trade Vertical Spreads Like a Pro

Tom Preston breaks down vertical spreads on Cherry Bomb, the strategy he thinks every options trader should learn first. A vertical is one expiration, calls or puts, buying one strike and selling another, and it comes with the three things beginners want most: a defined max profit, a defined max loss, and a probability of profit you can size up before you ever place the trade. From there Tom shows how the four basic verticals turn bullish or bearish, and how stacking them builds iron condors, butterflies, and broken wing butterflies. If you can read a vertical, you can read almost any complex position. Education, not a recommendation. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 What a vertical spread is 01:08 Defined profit, risk, and probability 02:27 Keeping your risk small 04:12 Bullish versus bearish spreads 05:56 Reading the risk graphs 08:16 Debit and credit spreads 09:38 Building an iron condor 10:54 Building a butterfly 12:50 The broken wing butterfly 14:10 Break positions into verticals #tastylive #optionstrading #verticalspreads #optionsforbeginners #creditspread #debitspread #ironcondor #tastytrade #optionseducation #tompreston tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.