tasty BITES

Weekdays 8:00 – 8:20a CT

Using Credit Spreads

tasty BITES

Options involve risk and are not suitable for all investors. Please read before deciding to invest in options.

One way to short premium is through the use of vertical spreads. This is a position that uses both long and short options across a range of strikes.

In this segment Tom and Tony address what we need to know about vertical spreads, specifically addressing spreads that are traded for a credit.

Here are a few basic guidelines:

  • Collect minimum credit equal to about ⅓ of the width of the strikes
  • Use OTM options
  • The short strike is closer to-the-money
  • If the credit is not high enough, consider alternate strategies

If you have a tastybite account or are just looking to review the mechanics of credit vertical spreads, check out this segment!

tasty BITES More installments

See All »

Latest doublerainbow Videos As of December 29

Most Shared From the last 30 days

Connect with your social account

Connect with your social account

Top Links

brent vs crude oil crude vs brent oil bull put spread vs bull call spread call debit spread cl futures contract debit spread strategy brent and wti spread bullish put spread vertical bull call spread crude oil contract size credit spread definition bearish put spread spread option pricing debit put spread