Spread
An options strategy involving the simultaneous purchase and sale of two or more options of the same class.
Explanation
Spreads reduce risk compared to single-leg positions by combining long and short options. Types include vertical (same expiration, different strikes), horizontal/calendar (same strike, different expirations), and diagonal (different strikes and expirations). Spreads can be credit (net premium received) or debit (net premium paid).
Example
A bull call spread: buy the 150 call and sell the 155 call on AAPL, both expiring in 30 days, for a net debit of $2.00.