Credit Spread Option – A credit spread is a strategy used by investors to earn income by trading two options in a given security. It involves simultaneously buying a call option and selling a put option of the same security, with both contracts having different strike prices and expiry dates. This type of option offers potential rewards if market conditions remain favorable; however, it also carries an inherent risk should the markets move unfavorably. Although this strategy has the potential to yield high returns, careful analysis must be made to ensure that the associated risks are managed appropriately.