Definitions for "Debit spread"
spread option position in which the price of the option bought is greater than the price of the option sold. see also credit spread.
A conservative strategy used in selling options. The investor buys a call (option to buy a stock at a certain price for a certain time) and sells a call with a strike price that is higher than the current market value of the underlying security. This creates a spread in the account and limits the risk and the reward on the options purchase.
A spread strategy that decreases the account's cash balance when it is established. A bull spread with calls and a bear spread with puts are examples of debit spreads.
an excellent way to reduce net capital outlay and lower risk, while still attempting to achieve healthy returns