Horizontal Spread is a simultaneous long and short derivative position on the same underlying asset and strike price but with a different expiration. This type of spread can be used to take advantage of time decay or to hedge against directional risk.The key to successful horizontal spreads is choosing the right expiration dates. If you are bullish on the underlying asset, you will want to choose an expiration date that is further out in time. This will give the asset more time to appreciate in value and increase your profits. If you are bearish on the underlying asset, you will want to choose an expiration date that is closer so that you can take advantage of any potential decline in value.Another important factor to consider when entering into horizontal spreads is your strike prices. You will want to make sure that your strikes are far enough apart so that there is room for movement in either direction without hitting your stop loss levels. However, if the market moves too far against you, it could result in a loss greater than what you intended.
