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With so many strike prices to choose from, how might you select strike prices when trading credit spreads?
Two of the four vertical spreads are considered credit spreads because you collect option premium when you enter the trade. The trade is entered for a “credit.”
The two credit spreads are the bear call spread, and bull put spread.
In this video, we’ll cover two common methods for choosing strike prices when trading credit spreads, as well as compare the pros and cons of each approach.
While there’s no single “optimal” way to choose strike prices, this video should help guide you towards more strategic strike price selection when selling call or put spreads. Additionally, you’ll get an introduction to using delta when selecting strikes.
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