Tastytrade is an online broker that specializes in options trading. They offer a variety of educational resources, including videos, articles, and webinars, to help traders learn how to trade options. One of their most popular resources is their “How to Enter Credit Spreads” video series. In the series, Tastytrade founder Tom Sosnoff breaks down the basics of credit spreads and explains how to enter them into a trading platform.
Credit spreads are a type of options strategy that can be used to generate income or to hedge against risk. Credit spreads are created by buying one option and selling another option with a higher strike price. The difference between the two strike prices is called the spread width. A credit spread is profitable if the underlying asset price stays within the spread width.
