A Step-by-Step Guide to Buying Call Debit Spreads

How to execute long debit spreads aka call debit spreads

Jul 26, 2023 at 10:24 AM
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As Schaeffer's Investment Research is not affiliated with thinkorswim® by TD Ameritrade, this article can only provide general steps on how to buy a call debit spread on thinkorswim®. However, keep in mind that financial processes and platforms may change over time, so it's always a good idea to double-check with the latest information from thinkorswim® by TD Ameritrade or consult a financial advisor if you're unsure about any options trading strategy.

Bernie Schaeffer has recently launched two new debit spread trading programs (Vertical Options Trader and Grand Slam Countdown) in which our members can take advantage of the powerful debit spread strategy. Both programs offer call debit spreads and put debit spreads. We will discuss buying call debit spreads on thinkorswim here, but you can review how to buy put debit spreads on thinkorswim® by clicking here.

Here is how to buy a call debit spread (aka a call vertical spread) on thinkorswim®:

Step 1: Open and Log In to Your thinkorswim® Account

If you don't have a thinkorswim® account, you'll need to sign up for one. Once you have an account, log in to the thinkorswim® trading platform.

Step 2: Access the Trade Tab

After logging in, you'll be taken to the thinkorswim® platform. Click on the "Trade" tab at the top of the screen to access the trading section.

Step 3: Select the Underlying Stock

In the trading section, you'll find a search bar. Type in the name or symbol of the underlying stock for which you want to buy a call debit spread. After selecting the stock, its options chain will be displayed.

Step 4: Choose the Call Option for the Long Leg

Within the options chain, locate the specific call option that you want to use as the long leg of your call debit spread. The long leg is the call option you're buying. Click on the ask price of the call option to open a buy order ticket.

Step 5: Choose the Call Option for the Short Leg

To create a call debit spread, you'll also need to sell a call option with a higher strike price than the one you're buying. Locate the specific call option you want to use as the short leg. Click on the bid price of the call option to open a sell order ticket.

Step 6: Set the Number of Contracts

In the order tickets for both the long and short call options, specify the number of contracts you want to trade. Make sure to review the order details and double-check that you're creating a call debit spread.

Step 7: Place the Trade

Once you've reviewed all the order details and are satisfied with your selections, click the "Confirm and Send" button to place the trade.

Step 8: Monitor Your Position

After placing the call debit spread trade, you can monitor it in the thinkorswim® platform. Keep track of the trade's performance and be aware of any potential risks associated with options trading.

Options trading can be complex, and buying call debit spreads involves specific risks. It's important to have a good understanding of options trading strategies and the risks involved before executing any trades. If you're new to options or need further guidance, consider seeking advice from a qualified financial advisor or exploring thinkorswim®'s educational resources.

Learn better through video? Here is a great video that we found on YouTube that will visually walk you through placing a call debit spread on thinkorswim® by TD Ameritrade:

SIR is not affiliated with any brokerage firm and does not endorse or recommend any specific brokerage firm. SIR is not and will not be responsible for any trades made by a broker on the subscriber's behalf under any circumstances. 


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