Spreads: Debit or Credit

Introduction

Spreads are an essential part of many traders’ arsenal. They add flexibility, a range of risk-reward profiles and the ability to trade virtually any market forecast: bullish, bearish, calm or volatile.

When it comes to the two basic trading biases, bullish and bearish, traders have to come to a decision: when bullish, should they opt for a bull call spread or a bull put spread? And when bearish, the choice is between a bear put spread and a bear call spread. Are there any differences between these pairs, and if so, what are they?

  VIX Snapshot

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