Option spreads goes to the heart of Options trading. Once you’ve mastered Option spreads, you’re now in a position to maximize your return opportunities from Options trading.
Many newcomers to Options are scared of spreads – when in fact, the primary advantage of spreads is either to reduce costs or reduce risks. There are two kinds of Option spreads – Credit spreads and debit spreads.
And within these categories there are 4 Option spreads – the Bull Call spread, the Bear Call spread, the Bull Put spread and the Bear Put spread.
But why use Option spreads ? And what advantages do they provide the options trader ?
Here’s a video that briefly describes the concept. For more information on these spreads, please refer to Module 4 of the OptionTiger courseware.