Credit Spread
An options strategy that sells a higher-premium option and buys a lower-premium option at a different strike, collecting net credit upfront.
Explained Simply
Credit spreads (bull put spreads or bear call spreads) are defined-risk strategies where you collect premium upfront and profit if the stock stays above (bull put) or below (bear call) your short strike. Max profit = credit received. Max loss = spread width minus credit. They benefit from time decay and IV decrease, making them ideal in high-IV environments. Probability of profit is typically 60-75%.
How Tradewink Uses Credit Spread
Credit spreads are recommended by our volatility play signals and as components of iron condors. The AI selects spreads at delta levels matching your risk profile: conservative (0.15-0.20 delta), moderate (0.25-0.30 delta), or aggressive (0.35-0.40 delta). Spread width is optimized for capital efficiency vs. risk/reward.
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See Credit Spread in action
Tradewink uses credit spread as part of its AI trading signal pipeline. Start getting signals that use this concept to find real opportunities.