purpose of spread strategies

I am still confused by how the book is explaining the reason for the bull and bear call/put strategies.

Could anyone help me understand?

If you think the stock is going to go up, you take a bull spread. You limit your gains but limit your losses. You can take a credit bull (basically a reduced premium short put opton)spread or a debit bull spread (basically a reduced premium long call option)

Reverse that for the bear spreads.

There’s a lot more advanced strategy with spreads but that’s the basics.

That’s better.

If you had a strong conviction, you’d buy a call option.

But in a bear vs. bull spread, why would you go long on a lower strike call for the latter vs. the former. If you are taking a bear spread position. you are expecting the market to go down so id imagine you would want to go long the calll with a lower strike.

do the math , which premium is lower priced? The low or high strike call? The low or high strike put?

Look at the payoff diagrams:

  • Bull: _/¯
  • Bear: ¯_

Now, determine what combinations of options you need to get those payoff diagrams.