Debit Spread
Debit spread - To be profitable the debit spreads must widen.
Call debit spread
-(Bullish)- write the call with the higher strike price.
The call that is bought will cost the most.
For example if you buy 10 XYZ June 80 calls at 9, write 10 XYZ June 90 calls at 5.
Net amount owed (Debit) would be 4.
The maximum gain on a call debit spread is the difference in strike prices less the net debit.
The maximum loss is the net debit.
The break-even point is the lower strike plus the net
