Debit Spread Calculator
Calculate max profit, max loss, breakeven, and risk/reward for bull call and bear put debit spreads. Enter your strikes and premiums to evaluate the trade before placing it.
Enter your debit spread details above, then click Calculate Debit Spread to see max profit, max loss, breakeven, and risk/reward.
For educational purposes only. Not financial advice. Read full disclaimer
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Debit Spread Formulas
Net Debit = Long Premium - Short Premium
Width = |Short Strike - Long Strike|
Max Profit = (Width - Net Debit) x 100 x Contracts
Max Loss = Net Debit x 100 x Contracts
Breakeven (Bull Call) = Long Strike + Net Debit
Breakeven (Bear Put) = Long Strike - Net Debit
Return on Risk = (Max Profit / Max Loss) x 100
Worked Examples
Example 1: Bull Call Debit Spread on AAPL
AAPL is at $175. You buy the 175 call for $6.00 and sell the 185 call for $2.50 (1 contract).
- Net Debit = 6.00 - 2.50 = $3.50 per share ($350 total)
- Width = |185 - 175| = $10
- Max Profit = (10 - 3.50) x 100 = $650
- Max Loss = 3.50 x 100 = $350
- Breakeven = 175 + 3.50 = $178.50
- Return on Risk = 650 / 350 x 100 = 185.7%
Example 2: Bear Put Debit Spread on SPY
SPY is at $450. You buy the 450 put for $7.00 and sell the 440 put for $3.00 (2 contracts).
- Net Debit = 7.00 - 3.00 = $4.00 per share ($800 total)
- Width = |440 - 450| = $10
- Max Profit = (10 - 4.00) x 100 x 2 = $1,200
- Max Loss = 4.00 x 100 x 2 = $800
- Breakeven = 450 - 4.00 = $446.00
- Return on Risk = 1,200 / 800 x 100 = 150.0%
How to Use This Calculator
- Choose your direction — Bull Call for bullish bias, Bear Put for bearish bias.
- Enter the long strike — the strike of the option you are buying (higher premium).
- Enter the short strike — the strike of the option you are selling to offset cost.
- Enter both premiums — the per-share price for each leg.
- Set the number of contracts — each contract covers 100 shares.
- Click Calculate Debit Spread — review max profit, max loss, breakeven, and return on risk.
Frequently Asked Questions
- What is a debit spread?
- A debit spread is a two-leg options strategy where you buy a higher-premium option and sell a lower-premium option at a different strike, both with the same expiration. You pay a net debit upfront. The trade profits when the underlying moves in your favor past the breakeven price by expiration.
- What is the difference between a bull call spread and a bear put spread?
- A bull call spread buys a lower-strike call and sells a higher-strike call — it profits when the stock rises above the breakeven. A bear put spread buys a higher-strike put and sells a lower-strike put — it profits when the stock falls below the breakeven. Both are debit spreads with defined risk and reward.
- Why use a debit spread instead of buying a single option?
- A debit spread costs less than a single long option because the short leg offsets part of the premium. This lowers your breakeven and reduces the impact of time decay. The tradeoff is capped upside — your profit is limited to the spread width minus the net debit.
- How does implied volatility affect a debit spread?
- Since you are both long and short an option, the net vega of a debit spread is relatively small. However, entering when IV is high means you pay more net debit, raising your breakeven. Falling IV after entry hurts slightly because the long leg loses more extrinsic value than the short leg.
- When should I close a debit spread early?
- Consider closing when the spread reaches 50-75% of max profit, especially if there are still many days until expiration. Holding to expiration risks the underlying pulling back. Closing early also avoids assignment risk on the short leg if it finishes in-the-money.