A spread is really just a combination of options that are put together for one trade. And you do this to manage risk to prevent big losses to basically leverage the time value.
We have very, very specific reasons for using spreads.
Debit and credit spreads differ in terms of how much you lose. And we use credit spreads in our trading because the probability is very high. We also have very strict risk management rules so that we prevent big losses.
Talk soon,
Al Losada
Founder | SimpleOptionStrategies.com
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