A Debit Spread is an options strategy that requires simultaneously buying and selling OTM options contracts on the same underlying security, same expiration date but different strike prices, resulting in a net debit. These strategies are considered Delta strategies as they benefit from the directional movements of the underlying security.
In terms of directional bias, a Debit Spread can be bullish (Bull Call Spread), bearish (Bear Put Spread) or neutral (Debit Condor).
STRATEGY BIAS: Bullish, Bearish or Neutral
STRIKE PRICES: Different
EXPIRATION DATE: Same
UNDERLYING SECURITY: Same
Bull Call Spread Risk Graph
Bear Put Spread Risk Graph
Debit Condor Risk Graph
