What the duece!?

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Nov 21, 2008 6:38 pm

How is this not a debit spread? I’m sure it’s something obvious that I’m overlooking and I’m sure someone’s going to point out that I’m an idiot for missing it. I know that you want the premium of a debit spread to widen and the premium of a credit spread to narrow.

    Buy 1 RST Jan 40 Call; write 1 RST Jan 30 Call   The longed premium is more than the short premium which is a Debit spread in which I want the premium to Widen, right? My Kaplan book says otherwise.    
Nov 22, 2008 3:31 pm

Read the explanations carefully. It makes sense. Just slow down, and take your time. It will start to click.