Correcting a Common Misconception on Vertical Spreads When I was taught options they taught us that when volatility is high or inflated you should sell credit spreads and when volatility was low you should use debit spreads. This type of…
Options trading is a powerful tool for investors looking to manage risk and enhance returns. Among the various strategies available, credit spreads and debit spreads are widely used. However, despite their popularity, these strategies are often misunderstood, leading to costly…
When traders first encounter the distinction between credit spreads and debit spreads, it’s easy to assume that one must inherently offer an advantage over the other. The truth, however, is far more nuanced. Neither strategy inherently outperforms the other—each can…