Hi Mark,

Does "buying" a call or put spread equate to a "debit" spread?
And does "selling" a call or put spread equate a "credit" spread?

Thanks - Debra


Hi Debra,

Yes and yes.

When you buy a vertical (both options expire on same date) spread, you buy the more expensive option and sell the less expensive option.

Thus, buying a spread means you pay a debit and selling means you collect a credit.

Mark

--
Mark D. Wolfinger

The Rookie's Guide to Options:The Beginner's Handbook of Trading Equity Options

blog: http://blog.mdwoptions.com/options_for_rookies

website:  http://www.mdwoptions.com