What's the difference between options debit and credit spreads?

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• What is an options spread and what are the types of spreads?

  An options spread is a strategy that involves taking multiple positions on options contracts, typically by buying and selling options of the same underlying security but with different strike prices and/or expiration dates. The main types of spreads ...

• Why can't I use the options premium received from selling the options contract?

  As per the exchange regulations, there are new rules regarding the availability of options premium received from selling in-the-money (ITM) and out-of-the-money (OTM) options. Here’s what you need to know: Collection of Net Option Value for In/Out of ...

• What are bull and bear spreads in options?

  A Bull Spread is an options strategy set up for potential profit when the underlying asset's price is believed to rise. Conversely, a Bear Spread is designed to potentially profit when there's an anticipated decrease in the price. Consider Sarah, an ...

• What will happen if I don't square off my Options contract on the expiry day?

  If you overlook squaring off your options positions on the expiry day, the position will settle based on the exchange's determined price. The difference between the settlement and your entry prices will reflect in your trading account ledger. ...

• How can I exercise my options at expiry, and how is P&L calculated?

  All In-The-Money (ITM) options are typically auto-exercised by the exchange at contract expiry. The Profit or Loss (P&L) from exercising an option is calculated as the difference between the exercise settlement price and the option's strike price, ...