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.
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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.
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