Spreads involve combining options with different strike prices, expiration dates, or underlying assets to manage risk or profit from price movements. By buying and selling options with different characteristics, traders can create various spread strategies to:

1. Reduce risk: By offsetting potential losses with gains from other options.

2. Generate income: By collecting premiums from sold options.

3. Speculate: By betting on price movements or volatility.

4. Hedge: By protecting against potential losses in an existing position.

Common spread strategies include:

1. Vertical spreads (bull or bear): Buying and selling options with different strike prices.

2. Horizontal spreads (time spreads): Buying and selling options with different expiration dates.

3. Diagonal spreads: Combining vertical and horizontal spreads.

4. Iron condors: Selling options with different strike prices and buying options with even more extreme strike prices.

5. Butterfly spreads: Buying and selling options with different strike prices to profit from volatility.

Spreads offer flexibility and risk management opportunities, but also require a solid understanding of options trading, market dynamics, and risk management techniques.