What Is a Common Options Spread Strategy That Involves Selling OTM Options?

A common strategy is the Credit Spread (e.g. a Bear Call Spread or a Bull Put Spread). This involves selling a nearer-the-money OTM option to collect premium and simultaneously buying a further-out-of-the-money option for protection.

This limits the maximum loss and turns the undefined risk of a naked short into a defined risk, while still profiting from time decay.