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.
Buying one option and selling another option, creating a spread position where the value of the long position exceeds the value of the short position.
A spread in which the value of the option purchased exceeds the value of the option sold.
Is an option position whereby the end result is a debit. For example, the investor who places a vertical bull call spread pays a net premium or is debited. Similarly, a risk manager who places a vertical bear put spread is charged a net premium or is debited.
difference in the value of 2 options
The difference in value between 2 options, where the value of the long position exceeds the value of the short position.
An option spread position in which the premium of the purchased option is greater than the premium of the option sold.
An option spread in which the premium of the bought option is greater than the premium of the one sold. See: Credit Spread; Option Premium; Option Spread
An option spread in which there is a net payout of premium.
Applies to derivative products. Difference in the value of two options, when the value of the one bought exceeds the value of the one sold. One buys a "debit spread". Antithesis of a credit spread.
In finance, a debit spread, AKA net debit spread, results when an investor simultaneously buys an option with a higher premium and sells an option with a lower premium. The investor is said to be a net buyer and expects the premiums of the two options (the spread) to widen.