Options are less expensive than stocks -- and vertical spreads make them even cheaper while maintaining much of the leverage that comes with straight option buying.

How so? A vertical debit spread is initiated when an options trader buys a call (or put) and simultaneously sells a higher strike call (or lower strike put) to create a spread at an initial debit in the investor's account. This effectively limits the dollar risk, by creating a lower breakeven point, while still targeting triple-digit gains.

The primary advantage of the debit-spread strategy is that the investor is able to enjoy the benefits of time decay in the sold option, which might help offset some of the time decay that he is battling with the purchased option. In other words, the vertical spread can keep you in the game longer if your underlying stock doesn't move right away.

For example, let's say you buy a call option and your stock is flat for the first two weeks. Your option position could be showing a 20% loss just due to time decay. Many straight option players can get stopped out of their trade in this case, only to watch the stock move dramatically in their desired direction a few days later. So, they were right on the move, but missed it because they were already out of the trade.

In a vertical debit spread, because your breakeven is lower, you have more staying power. Your position might only be down 5% to 10% after those first two weeks, so you're able to stay in the trade to reap the benefits when it moves a few days later.

When you're looking for more bang for your buck than just buying stocks in a trending market, but the conditions aren't quite ripe for straight option purchases, the long vertical spread offers rich opportunities.

How will our Vertical Spread Service work?

• Receive an average of 2-to-4 real-time spread trade recommendations a month. Each trade will target double your money gains of 100%.
  
  
• Benefit from our proprietary market analysis. You will receive commentary for each spread recommendation shortly after each trade has been sent. And we'll tell you when to close your trade to maximize gains or cut losses short.
  
  
• You will have immediate access to our FREE online Handbook with everything you need to successfully place these trades.
  
  
• Schaeffer’s Alert Service Command Center: View all of your vertical spread trades in one location. See your open positions and trade status 24 hours a day, 7 days a week.