Debit Spread

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TermDebit Spread
Definition
What does Debit Spread mean? It is act of buying a more expensive call/put and selling a less expensive call/put on the same underlying instrument.

How the exam might test Debit Spread: if an investor pays $500 to buy an XYZ Jan 50 call and receives $200 for selling an XYZ Jan 55 call, he has established the debit call spread at a net debit of $300.