Tag Archives : net credit

What do you understand by Credit Spread?

What do you understand by Credit Spread?

Posted by on August 9, 2009 · 0 Comment

In finance, If there is an involvement of a purchase of one option and a sale of another option in the same class and expiration but different strike prices then it is referred to as a credit spread, or net credit spread. For entering the position investors receive a net credit, and they want the spreads to narrow or expire for profit. On the contrary, to enter a debit spread an investor would…

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