 If you're bullish on a stock, have you ever been confused as to whether you should do a short put vertical or a long call vertical? Both are bullish positions, but there are slight nuances between them. Welcome to another video from NavigationTrading.com. In this lesson, we are going to discuss the difference between a short put vertical and a long call vertical, both of which are bullish strategies, meaning you want the price of the stock to go higher. But there are some very slight differences between the two, so let's jump in. In this example, we'll use the S&P 500 ticker SPY. If you go to the trade tab in Thinkorswim, this will populate the options chain. In this example, I am looking at this at a 37 days to expiration cycle. Let's start on the put side and discuss the short put vertical. We're going to start with some options out of the money. Let's just select around the 35. This should give us about the range we want. If we right click, sell vertical, we're selling a short put vertical. Let's just move this to about five points wide. We'll sell the 259, and we will buy five strikes lower, which is the 254. If we take this over to the Analyze tab in Thinkorswim, this is what the risk profile graph looks like. When we set these up, we like to set them up with about a 60% or so probability of success. You've got about a 60% chance at expiration. This will be profitable, about a 40% chance of loss. I also like to make sure that my max loss, which in this case is $369, is not more than three times what my max profit is. I've got a max profit of $131 and a max loss of $369. As I mentioned, this is a bullish position. We want the price of the stock to go up, but it can also come all the way down to this level here, to this breakeven point, and we can still make money on the trade. That's one of the beauties of vertical spreads. Let's go back to the option chain over to the call side. We're going to look at the same strike. We're going to do the 254. We're going to buy a vertical on the put side. We want that five points wide as well, so it'll be the 259 is the one that we'll sell. Now, you'll notice these options are in the money. Is there a risk of assignment? Yeah, it's very slim, but you do have the risk of assignment. Now, if you do get a sign, you simply close out the trade and move on. It's not that big of a deal, but the bottom line is we're typically out of these trades way before expiration, so the chances of us getting a sign is very slim, and it rarely happens. So let's take this trade over to the analyze tab so we can compare. I'm going to check off the short put vertical so we can look just specifically at the long call vertical. So I've got that up now, and as you can see, it's almost identical. Now the market's open right now, so if I adjust these prices so that we're exactly the same, move it up two cents down a couple pennies. So now we've got a max profit of $131 and a max loss of $369. That's the exact same as the short put vertical. So again, if I click on the short put vertical and I click off of the long call vertical, you can see they are identical. Same max profit, same max loss. Both of the trades are bullish, so we want the price to go up, but we have this buffer to the downside where we can come all the way down to here and still make money. So the difference between the two is almost nothing. The only nuance between the two is the effect of implied volatility. If we are buying a long call vertical and the price goes up, it goes in our direction, typically implied volatility is going to be contracting. So that's actually going to work just slightly against us. Whereas if we're selling a put vertical and the price is going higher, typically implied volatility is going to be contracting and that's going to work slightly in our favor. Now when I say slightly, I mean ever so slightly. These trades are almost identical, but we're talking about maybe a, you know, if you're trading one contract, you might be getting an advantage of maybe a dollar, $2 difference from that implied volatility, depending on how much it contracts or expands of one versus the other. So it's not a big deal. And remember, it works both ways. So if this price goes against you, it goes lower than typically if implied volatility is going to be expanding, which is going to benefit the long call vertical just ever, ever, ever, ever so slightly. So if you're bullish on a stock and you want a higher probability of success with defined risk, a vertical spread works, and both a long call vertical and a short put vertical are equally good options. I hope that helps. If you have any questions, feel free to drop us a line in the community at community.navigationtrading.com. See you there.