Obsidian Academy
Vertical Spread
Pair a long and short leg at different strikes, same expiry. Cap both profit and loss.
Four flavors
Bull call spread: long lower-strike call + short higher-strike call (net debit). Bear put spread: long higher-strike put + short lower-strike put (net debit). Bull put spread: short higher-strike put + long lower-strike put (net credit). Bear call spread: short lower-strike call + long higher-strike call (net credit). Credit spreads profit from time decay; debit spreads profit from direction.
On Obsidian
Use Forge to chain the two legs into a single vault position. The short leg's collateral requirement drops dramatically because the long leg caps the max loss.