Debit Spread

Market Terms

We don't know everything about the markets.  We're just devoted to learning.  Taken from those smarter than ourselves, here's how we define Debit Spread.

Also called a net debit spread.  A strategy involving a investor simultaneously buying an option with a higher premium and selling an option with a lower premium.  The investor is said to be a “net buyer” and expects the premiums of the two options (or the options spread) to widen.  A bullish debit spread is constructed using calls while a bearish debit spread is constructed using puts.