About the Vertical Spread Calculator
A vertical spread buys one option and sells another of the same type and expiration at a different strike. This vertical spread calculator handles all four versions: the bull call spread and bear put spread (debit spreads, where you pay to open) and the bull put spread and bear call spread (credit spreads, where you are paid to open). Enter the two strikes, the premium of each option and the number of contracts to see the net premium, maximum profit, maximum loss, breakeven price and reward-to-risk.
It is for options traders choosing strikes, comparing a debit spread with a credit spread on the same view, or checking a broker’s risk figures. Enter a stock price at expiration to see the profit or loss there, and use the payoff chart to see the whole range of outcomes.
Results are at expiration and per the standard 100-share contract multiplier. Commissions, early assignment and dividends are ignored. Always enter the premium of the lower-strike option in the lower-strike field, whichever leg you buy or sell.
With the default inputs, the maximum profit is $660.00. Change any value above to recalculate instantly.
How to use the vertical spread calculator
- 1Pick the spread type that matches your view: bullish or bearish, debit or credit.
- 2Enter the lower and higher strikes.
- 3Enter the premium of the lower-strike option and of the higher-strike option.
- 4Enter the number of contracts.
- 5Read max profit, max loss and breakeven, and try an expiry price to see the P&L there.
Formula and method
A vertical spread’s payoff is capped on both sides because the short option offsets the long option beyond the strikes. For a debit spread (bull call or bear put) you pay the difference between the two premiums; the best case is the strike width minus that debit and the worst case is losing the debit. For a credit spread (bull put or bear call) you receive the difference; the best case is keeping the credit and the worst case is the strike width minus the credit.
The breakeven sits one net premium away from the strike of the option you bought (debit) or sold (credit). Dollar figures multiply the per-share result by 100 shares per contract and the number of contracts. All values are at expiration and exclude commissions.
- K₁, K₂
- Lower and higher strike prices
- Debit
- Premium paid for the long option minus premium received for the short option
- Credit
- Premium received for the short option minus premium paid for the long option
Worked examples
Bull call spread: buy 100 call at $5.20, sell 110 call at $1.80
The net debit is $5.20 − $1.80 = $3.40, or $340 per contract. The best case is the $10 width minus $3.40 = $6.60 ($660) if the stock is above $110. Breakeven is $100 + $3.40 = $103.40, and at $108 the spread makes $460.
Bull put credit spread, 2 contracts
Selling the 100 put for $2.90 and buying the 95 put for $1.10 brings in a $1.80 credit, $360 for two contracts. Maximum loss is ($5 − $1.80) × 200 = $640, and breakeven is $100 − $1.80 = $98.20. At $102 both puts expire worthless and you keep $360.
Bear put spread: buy 50 put, sell 45 put
The debit is $3.00 − $0.90 = $2.10 per share, $1,050 for five contracts. If the stock falls below $45 you earn the full $5 width minus the debit: $2.90 × 500 = $1,450. Breakeven is $50 − $2.10 = $47.90.
Frequently asked questions
What is the difference between a debit and a credit spread?+
In a debit spread you buy the more expensive option and pay to open, profiting if the stock moves your way. In a credit spread you sell the more expensive option and are paid to open, profiting if the stock stays on the right side of the short strike.
How do I calculate max loss on a credit spread?+
Subtract the credit received from the distance between the strikes and multiply by 100 per contract. A $5-wide spread sold for $1.80 has a maximum loss of $3.20 per share, or $320 per contract.
Which is better, a bull call spread or a bull put spread?+
Both profit from a rising stock with capped risk. With similar strikes they have nearly identical payoffs; the bull put spread collects cash up front and benefits from time decay, while the bull call spread needs the stock to rise to profit.
Can I be assigned early on a vertical spread?+
Yes. The short leg of an American-style spread can be assigned before expiry, especially when deep in the money or before an ex-dividend date. Your long leg still limits the loss, but you may need to manage the resulting stock position.
What is a good reward-to-risk for a vertical spread?+
Debit spreads often target 1:1 or better. Credit spreads usually have reward-to-risk below 1 but a higher probability of profit. Compare reward-to-risk with the probability of each outcome rather than looking at either alone.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.