A Credit Spread is an options strategy that requires simultaneously buying and selling OTM options contracts on the same underlying security, same expiration date but different strike prices, resulting in a net credit. These strategies are considered Theta strategies as they benefit from time decay.
In terms of directional bias, a Credit Spread can be bullish (Bull Put Spread), bearish (Bear Call Spread) or neutral (Iron Condor).
STRATEGY BIAS: Bullish, Bearish or Neutral
STRIKE PRICES: Different
EXPIRATION DATE: Same
UNDERLYING SECURITY: Same
Bull Put Spread Risk Graph
Bear Call Spread Risk Graph
Iron Condor Risk Graph
