Vertical Debit Spread Question???

[jacobogrady]

I am wondering if a vertical debit spread is the same as a credit spread in regards to if the stock price stays above your strike price you can make max profit? If not how is profiting from a debit spread different? thanks. 

[Kim]

Yes it's the same if using the same strikes.

 

• Are Debit Spreads Better Than Credit Spreads?

 

[jacobogrady]

After reading the article you shared it is basically saying Credit vs debit spreads are essentially the same regard payout when using the same strike so there is no advantage of using one over the other which ever you prefer is that correct? Due to the payout being the same when using the same strike prices and having to pay for debit is the same as your money being stuck in buying power. 

[Kim]

Correct. The only practical consideration is liquidity - OTM options tend to be more liquid.