A credit spread is constructed by buying one stock option and selling another of the same type (call or put) in the same expiration month but at different strike prices. The option that we sell is more expensive than the option that we buy, thus resulting in a net credit (deposit) to our trading account.

In this strategy, we are not paying for the spread, someone else is paying us. Our system is focused on three different types of credit spreads: Bull Put Spread, Bear Call Spread, and Iron Condor.

These spreads are sometimes called "vertical spreads." There are six main advantages of our system.

1. We don't need a directional move in the stock. The stock can even go against us and we still make the same amount of money.
2. We profit from time decay. The rapid decay in the option's value works in our favor. Time is on our side.
3. We don't need to rely on Market timing to profit. Because we give ourselves a cushion when we place the spread, we can weather a downturn and still profit.
4. We have a high probability of winning trades month-after-month. Although past performance does not guarantee future results, our track record speaks for itself.
5. We usually don't need to make daily adjustments to the positions. Instead, we like to enter the spread and then let them expire worthless at expiration.
6. We collect the profit upfront. The credit goes into our trading account when we place the spread.