 Welcome to intermediate options strategies. So far we've learnt about the four different basic options, which is the long call, the short call, the long put and the short put. Now it's time to move our skills to the next level. In this module we'll be covering spreads. We'll study the philosophy of spreads and we'll also study the different kinds of spreads like debit spreads, credit spreads. We'll first look at what a spread is and why we use them. Bear in mind spreads build on the individual option strategies that we've learnt so far and this is just the next step of our options education. So we've looked at four strategies so far. We've looked at the long call, which is a bullish strategy. Then we looked at the short call. Then we looked at a long put, which is a bearish strategy and then we looked at a short put, which is a flat to bullish strategy. In all of these strategies, there are pluses and minuses. When we buy options, although we have unlimited profits, we can also lose money if the price of the stock goes against our expectation. Those losses can accumulate. Although those losses are limited, they can still become quite large. When we sell options, we know we are exposed to unlimited losses and our rewards are limited but our losses are unlimited. Both these kinds of strategies involve pluses and minuses and risks and rewards associated with both of these. When we introduce spreads in this course, what we are going to try to do is to optimize all of these strategies a little bit more. We're going to have to compromise here. We're going to have to give up something to get something else. What a spread does is it takes your individual option position and provides an element of risk control and provides an element of cost control to a single option position. The philosophy of spreads can best be understood by taking the four different examples and that's what we are going to do in this course.