Back to Information Home

What is a Spread?

General Options

A spread is a type of options strategy in which the trader simultaneously buys or writes different options of the same type (call or put) on the same underlying asset, but with different strike prices and/or expiration dates. Not to be confused with the bid ask spread. 

The term spread by itself is quite vague. A spread can be opened via a credit or a debit. In other words: some spreads require a debit to open (a debit spread), whereas other spreads may provide the trader with a credit (a credit spread).