I want to show you a little strategy as far as vertical spreads are concerned, so that way you can see how to construct one. Keep in mind it's not a recommendation to do this, to buy or sell or trade any stocks or securities. It is to give you some insight on what you could do when it comes to options.
We're going to take a look at a bullish and bearish vertical spread as far as buying goes when we look at Apple.
First off, let's look at the chart of Apple.
If you use technicals to get a little insight and idea of projection directionally of where the stocks are going to go, you could this stock is now potentially above this 165 level. It's going to go a little bit higher and continue in that motion. If you believe that, great. If you think it's a bit overextended, in that case, you would maybe put on a bearish vertical spread.

We're looking at two different approaches depending on which way your bias is on the direction. These are directional bets; it's looking for a trend, so the idea that this is done.
Let's first do an upward movement on construction for the upside. This would be a bullish vertical spread. The way that it's set up is let's go ahead and pop in our ticker symbol right here, go ahead and put in Apple. As we go into Apple, let's say we want about 60 days until expiration - so give us 60 days, what I'll do is I'll go ahead and do a 180. We'll buy a single contract here, I'll analyze the trade, and you can see this gives me unlimited upside.
So now the downside is I'm paying 365, $3.65 to open up this spread, to open up this option contract.
What to do to reduce that risk?
I'll go ahead and sell one at a higher level, so let's say it's going to go higher probably but I don't think it'll get to 210 and even if it does go to 210 it won't work beyond that much further.
So, I'll sell one over here, and this helps offset the price. We'll sell a single. It helps offset the cost of the cash that I have to pay for that initial amount.
Let's say you usually pay 365, $3.65 - that's your max loss, but if you add this in, let's say the one that you sell, now you're only paying 342 so far you still have some excellent upside room. Your potential to make $2663 on that movement for risking $337.
Now, if you believe it won't go as high and you want to bring that in a little bit sacrifice a few your profits, you could bring this in a bit of bit slightly to the two hundred. Instead of paying that 360, you're only paying about 305. Again, if I bring it in even further, let's say to 190 on my vertical spread, you can see how I'm only paying $234 at expiration to make about $772 potentially.

You're almost looking double your investment or margin amount because you're bringing in credit here of a $1.26 and you're buying for $3.55. The difference between those two is what you're left which is the $228.
In this case and scenario, the stock does have to move to about 190 or higher at expiration. If it runs somewhere in between there, you still make about $402 because that's expiration.
Can you get out of this before expiration?
Absolutely! The white line is your T+0 line, so you could still get out before expiration.
If it goes to 220 tomorrow, you can still get out of it.
If you bought a single at 250, you would have made about $6000. In this case, since we're selling one right here at the 190, it caps our potential win. But keep in mind, how often is the stock like Apple going to explode to 250 within sixty days? You're looking for a massive movement, and the chance and the probabilities of that is slim.