CXMelga Posted November 11, 2018 Posted November 11, 2018 I have a few basic question about vertical spreads please, just so I am sure I get my terminology and understanding correct I understand there is a 'credit' spread and a 'debit' spread As far as I know the above is nothing to do with weather the spread is above or below the market, but weather or not your get a 'credit' (take in a net premium) or you have to pay a 'debit' cost you money to take on the position, is that correct ? if the above is correct then assuming the underlying is trading at $100 if I sold a 'call' credit spread this would mean I sold an option that consisted of for example short call at strike $110 long call at strike $120 is the above a correct description of a call credit spread correct ? then if I short put at strike $90 long put at strike $85 the above would represent a put credit spread ? long call at strike $110 short call at strike $120 the above would represent a call debit spread ? long put at strike $90 short put at strike $85 the above would represent a put debit spread ? Thanks very much CXMelga Quote
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.