Which is more commonly used in the cryptocurrency market, credit spread or debit spread?

1 answers

• Lykke MckeeJan 25, 2024 · 2 years ago
  In the cryptocurrency market, both credit spreads and debit spreads are commonly used by traders. A credit spread involves selling an option with a higher premium and buying an option with a lower premium, resulting in a net credit. On the other hand, a debit spread involves buying an option with a higher premium and selling an option with a lower premium, resulting in a net debit. Both types of spreads have their own advantages and disadvantages, and the choice between them depends on the trader's market outlook and risk tolerance. Credit spreads are often used when traders expect the price of the underlying asset to remain relatively stable, while debit spreads are used when traders expect the price to move significantly. It's important for traders to understand the characteristics of each type of spread and consider their own trading goals before making a decision.
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