Question 1

What is a Call Debit Spread?

Accepted Answer

You buy (long) a Call and sell (short) a further OTM Call

Question 2

What is the max loss of a Call Debit Spread?

Accepted Answer

The max loss is Cost of the debit spread.

Question 3

When do I breakeven when utilizing a Call Debit Spread strategy?

Accepted Answer

The breakeven is defined as Strike Price of the bought (long) Call plus the Premium (debit) paid.

Question 4

What is the typical application of a Call Debit Spread?

Accepted Answer

The typical applicatio is: 1. Speculate on an increase in price and neutral or slightly-increasing volatility.