What Is a Credit Spread? Strategy, Examples & Risks

The Automated Trading Podcast by Advanced AutoTrades

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This episode provides an extensive explanation of credit spreads, an income-generating options strategy defined by selling one option and buying another at a different strike price, thereby collecting a net premium. It details how these defined-risk strategies work, offering concrete examples such as the Bull Put Spread used on the SPX index, which the author claims has a high historical win rate when automated. Furthermore, the hosts differentiate the options trading concept from the fixed-income concept of a bond credit spread, which measures the yield difference between a risky bond and a government bond, acting as a crucial barometer of market sentiment and credit risk. Read the full blog article here: https://advancedautotrades.com/what-is-a-credit-spread-2/

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