The Vertical Debit Spread refers to a vertical spread whereby a net debit is taken to enter the trade. A bullish Vertical Debit Spread can be constructed using call options and is known as the Bull Call Spread. A bearish Vertical Debit Spread can be created using put options and is known as the Bear Put Spread.
Vertical Credit Spread
Vertical spreads can also be entered on a credit. See Vertical Credit Spread.
Scope of the risk estimate
This page describes a family of positions or a hedge. Exact profit, loss and breakeven depend on the specified legs, valuation date, contract terms and any underlying portfolio. A portfolio hedge also depends on basis and correlation; protection is not guaranteed. Do not infer an exact payoff or a risk-free arbitrage from the strategy name alone.
