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Demystifying Simple Spreads: Debit Versus Credit Spreads Explained

by | Jun 20, 2024

Join Chuck and Graham for a free option trade straight from Chuck’s new Copilot trading suite — LIVE at 1 p.m. ET TODAY!

Today, I’m going to do everyone a big favor and demystify credit versus debit spreads. 

So in this short video, I’m going to explain the difference between credit and debit spreads, and give my rules of thumb for trading them. I’ll cover using a credit spread to help finance a debit spread, highlighting the importance of considering the VIX Volatility Index in trading decisions.

📈 Debit spreads are a good option when the VIX  and implied volatility are low.

📉 Credit spreads can be used as an income strategy, especially when the VIX is high.

💰 Bull call spreads are a debit spread that involves buying a call option and selling a higher-strike call option.

💲 Bull put credit spreads involve selling a put option and buying a lower-strike put option.

🔄 Limited bullish risk reversals combine a bull put credit spread with a bull call spread to reduce risk and potentially increase profit.

Lance Ippolito
Lance Ippolito Trading

Follow along and join the conversation for real-time analysis, trade ideas, market insights and more!

Telegram: https://t.me/+-gVwEIwGJhplMTgx 

*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. 

P.S. Graham and Chuck Are Giving Everyone a FREE Option Trade TODAY — Don’t Miss Out!

When two trading pros team up to give you a free option trade idea… you know it’s going to be a great opportunity!

And that’s what Graham Lindman and 10-time trading champ Chuck Hughes are going to do for you this afternoon. 

In addition to the option trade, you’re going to get a complete rundown on Chuck’s state-of-the-art trading suite that flagged the option for an entry… 

Which means that if all goes well, the stock could be set to soar double digits… 

According to the software’s creator — Chuck — all you have to do is look for this buy signal… 

Take 2 minutes to place a trade when the system tells you to… 

And if all goes well, come back to a nice gain in less than a week! 

So far, the software’s trades have a 70% to 90% win rate…

And Chuck believes that history could repeat itself with this next option trade. 

Obviously, he cannot promise you future profits or shield against losses… 

But he does promise to give you all the details about this amazing opportunity. 

Save this email and get your free trade… 

And Join Chuck and Graham at 1 p.m. ET!

Disclaimer: The profits and performance shown are not typical, we make no future earnings claims, and you may lose money. Over the testing there were around 16 trades per week with an average 72.4% win rate and average 15 day hold time.

WRITTEN BY<br>Lance Ippolito

Lance Ippolito

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