Spreads Overview

A spread being the purchase and sale of different options on the same underlying as a package.

Important things to remember about spreads:

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Debit means you pay for your position by buying a call or put that is more expensive than the option you are selling

Credit means you receive money for your position by selling a call or put that is more expensive than the option you are buying

Direction for Spreads

Arrows indicate the way you want the stock to move