"Spreads" is the term used to describe an option strategy that consist of going long (Buy to Open) one kind of option and simultaneously going short (Sell to Open) another option of a different strike price and/or expiration date on the same underlying instrument.

Spreads confer on the option position varying degrees of protection when the underlying stock do not move as predicted, allow the position to profit from the premium of the short options as in many of the Neutral Strategies or even profit from more than one possible direction of moves.

There are many different types of option spreads:

1. Vertical, Horizontal and Diagonal Spreads

2. Debit and Credit Spreads

3. Ratio Spreads

4. Calendar / Time Spreads

5. Forward and Back Spreads

Neutral Strategies, or sometimes known as "Frontspreads", are option strategies that are constructed to profit when the underlying instruments stays sideways or stagnant. Neutral strategies profits mainly from option premium decay of options that you sell or "write".

Here is a list of basic Neutral Option Strategies:

Short Straddle

Short Strangle

Butterfly Spread

Condor Spread

Covered Call

Covered Put

Collar

Iron Condor Spread

Iron Butterfly Spread

Volatile Strategies or sometimes known as "Backspreads" are option positions that are constructed to profit when the underlying instrument moves either Up or Down. This kind of strategy is especially useful when the underlying instrument is expected to move strongly but is uncertain in which direction. Such a condition is known as a volatile market or volatile stock and thus the name "Volatile Strategies". A trader who uses Volatile Strategies are known as a BackSpreader. Volatile Strategies are not only capable of profiting when the undering instrument moves up or down strongly but also when the underlying instrument stay stagnant as implied volatility increases. An example of such a circumstance is when a company is pending an important approval on its new and important product line. The approval of which is certain to move its stock price up greatly but a disapproval could cause its stock price to plunge greatly.

Here is a list of basic Volatile Strategies:

Long Straddle

Long Strangle

Bearish Strategies are option positions that are constructed to profit from a drop in the underlying instrument while at the same time offering a certain degree of upside protection.

Here is a list of basic Bearish Option Strategies:

Bear Call Spread

Bear Put Spread**

Naked Call Write

Buy Put Option

Calendar Put Spread

**Recommended strategy which beginner option traders should study

Bullish Strategies are option positions that are constructed to profit from a rise in the underlying instrument while at the same time offering a certain degree of downside protection.

Here is a list of Bullish Option Strategies:

Bull Call Spread**

Bull Put Spread

Naked Put Write

Buy Call Option

Calendar Call Spread

**Recommended strategy which beginner option traders should study