Explore Your Options by Tom Gentile
DEBIT SPREADS OR CREDIT SPREADS … WHICH IS BEST?
Many people ask me this question about debit and credit spreads: “I hear one makes money and the other costs money. Is that true?” In a way, that is correct, but it’s not as cut-and-dried as you may think.
Credit means you are generating a credit to the account. Technically, you could say the credit or money brought in to the account is money made, but realize that this money must remain tied up until the trade is either closed or expiration happens ...