“If the share price will either rise or fall significantly, explain why a bull spread is not as effective as a straddle.”
Their explanation is “A bull spread would lose money if the share price falls sharply, and would make only limited profits (compared to a straddle) if the share price rises.”
In this case, they are referring to a bull call spread? Because I don’t think a bull put spread would lose money if the prise fell sharply, right?