Margin requirements for a long vertical debit spread
Only margin accounts may trade call or put spreads
Long (debit) vertical spreads do not have a margin requirement. Long debit spreads need to be fully paid. However, cash accounts cannot trade vertical spreads. To learn more about account types, levels, and permissible strategies, please click here.
Long (debit) spread example in a margin account
For example, to buy the following spread, you would need $35 in your account to pay for the spread fully.
- Buy to open 1 ABC 100 Call for $1.40
- 1.40 x 1 x 100 = -$140
- Sell to open 1 ABC 101 Call for $1.05
- 1.05 x 1 x 100 = +$105
Net Cost: $105 - $140 = -$35