Explain why option traders often use spreads

Reference no: EM131326027

Explain why option traders often use spreads instead of simple long or short options and combined positions of options and stock ? Suppose that an option trader has a call bull spread.

The stock price has risen substantially, and the trader is considering closing the position early. What factors should the trader consider with regard to closing the transaction before the options expire?

Reference no: EM131326027

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