Credit Spread
Credit spread - option
spread position where the premium of the option sold is greater than the premium of the option purchased.
There is more premiums received that paid.
The investor will profit if the spread narrows.
For example:
if you buy 10 XYZ June 25 calls at 1
and write 10 XYZ June 20 calls at 4.
The net amount received (credit) is 3.
To be profitable the credit spread must narrow.
