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Debit spread calculator
buy the move, sell away the tail

A debit spread buys an option and sells a further-out one of the same type and expiry to reduce the cost. There are two: a CALL debit spread for a move up, and a PUT debit spread for a move down. Selling the far leg cuts what you pay and lowers the breakeven, at the cost of capping the profit at the short strike. It is the trade for a view with a target, not an open-ended one.

Outlook: Directional — a move to a level, not through it

Max profit

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best case at expiry

Max loss

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worst case at expiry

Breakeven

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where the trade turns even

Net debit / credit

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to open the position

Your debit spread

Per-share premiums. One contract = 100 shares.

Underlying price

Long call @ strike

Premium paid

Short call @ strike

Premium collected

Contracts

100 shares per contract

Profit at expiry Loss at expiry Breakeven Strikes & spot

How a debit spread pays

Net debit = premium paid - premium collected Max loss = net debit x 100 x contracts Max profit = (strike width - net debit) x 100 x contracts Breakeven = long call strike + net debit (call side) = long put strike - net debit (put side)

Cheaper than the outright, and breaks even sooner. The premium collected on the short leg comes straight off your cost and off the breakeven.
The cap is the trade-off. Everything beyond the short strike belongs to whoever bought it from you. If you expect a runaway move, this is the wrong structure.
Less exposed to volatility than a single option. The two legs offset much of the vega, so a fall in implied volatility hurts far less than it does an outright long.
Still needs the move. Time decay works against a debit spread on balance. Being right eventually is not the same as being right by expiry.

Worth naming. A debit spread can be right about direction and still lose: price finishing between the long strike and breakeven is a partial loss, and finishing below the long strike is a total one. Check the breakeven against a realistic move for the time you have - the expected move over the days remaining is the honest yardstick - rather than against the target you are hoping for.

What this does not model

Every figure here is the payoff at expiry. Before then your position is marked at market prices that still carry time value, so a trade can show a loss while sitting exactly where you wanted it — falling implied volatility alone will do that.

Short legs carry assignment risk. American-style options can be exercised at any time, most commonly on in-the-money calls just before an ex-dividend date. The diagram assumes you hold every leg to expiry.

For the live version — real Greeks, current marks and what-if scenarios against actual chain data — that is what the GreeksView desk does, in your browser, on your own broker keys.

Frequently asked questions

What is a debit spread?

Buying one option and selling a further-out option of the same type and expiry. The net premium is a debit you pay, which is also the most the position can lose.

Call debit spread or put debit spread?

A call debit spread (bull call spread) profits when price rises toward the short call. A put debit spread (bear put spread) profits when it falls toward the short put. Same structure, opposite direction.

Why sell the far leg at all?

It lowers the cost and the breakeven. Buying the 100 call at $4.00 needs $104.00 to break even; selling the 105 against it for $2.10 cuts the cost to $1.90 and the breakeven to $101.90 - at the price of capping profit at 105.

What is the reward-to-risk on a debit spread?

Max profit divided by net debit. A $5 spread bought for $1.90 can make $3.10 against $1.90 risked, about 1.6 to 1 - before considering how likely the underlying is to reach the short strike.

Are commissions included in these numbers?

No — every figure is gross. On multi-leg positions this matters more than people expect: four legs to open and four to close is eight commissions against what may be a couple of hundred dollars of credit. Check your broker's per-contract rate against the max profit shown here before deciding a trade is worth putting on.

Run this against a live chain

GreeksView builds positions from real option chains with live Greeks, gamma exposure and what-if scenarios — in your browser, on your own broker keys.

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