What is a Credit Spread?
What is a Credit Spread and how do i trade one i hear you say.
Credit Spread explained: A Credit Spread consists of selling and buying an option on the same security within the same expiration period.
Sell the option closest
Buy the option furthest
Profit from the difference
Repeat the process
Example: Sell one SPY put @ 190 for a credit of $1.20 Buy one SPY put @ 185 for a debit of $0.75 Profit the difference of $0.45 per contract spread.
Credit Spreads can easly be placed in one transation through most Option Freindly brokers platforms.
What to learn more, then register today