Vertical spreads
How do I calculate the Maximum Profit, Maximum Loss, and Breakeven for a vertical debit spread?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
For a vertical debit spread, maximum profit equals the strike width minus the net debit paid, maximum loss equals the net debit paid, and breakeven is the long strike adjusted by the debit amount in the direction of the trade's intended move.
How it works
Unlike credit spreads, debit spreads require the underlying to move favorably past breakeven to become profitable, since the trader pays upfront rather than collecting premium at entry.
An example
A $5-wide call debit spread bought for $2 has a maximum profit of $300, maximum loss of $200, and a breakeven at the long strike plus $2 per contract.
Risk & limitations
OIC notes maximum profit is only achieved if the stock closes at or beyond the short strike at expiration, which requires a meaningful directional move.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.