What is the difference between an option spread and a option straddle

An option spread and an option straddle are two distinct options trading strategies, each with its own characteristics and objectives:

1. Option Spread: An option spread is a strategy that involves buying and selling options with the same type (call or put) and the same underlying asset, but different strike prices or expiration dates. The goal of an option spread is to profit from the difference between the prices of two options, or the spread, rather than from the underlying asset's price movement. This strategy is often used to hedge risks or to speculate on the price movement of the underlying asset.
2. Option Straddle: An option straddle, on the other hand, involves simultaneously buying or selling both a call option and a put option with the same strike price and expiration date for the same underlying asset. The straddle strategy is designed to profit from significant price movements, either up or down, in the underlying asset. It is a neutral strategy in the sense that it can potentially benefit from volatility, regardless of whether the price of the underlying asset rises or falls.

In summary, the key difference between an option spread and an option straddle is that an option spread involves using options with different strike prices or expiration dates to profit from the spread between them, while an option straddle involves using options with the same strike price and expiration date to profit from overall market volatility.