Options Trading 101: Put Debit Spreads on Schwab's Trading Platform

How to execute short debit spreads aka put debit spreads

Jul 28, 2023 at 12:08 PM
facebook X logo linkedin


As Schaeffer's Investment Research is not affiliated with The Charles Schwab Corporation, this article can only provide general steps on how to buy a put debit spread on Charles Schwab. 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 Charles Schwab 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 put debit spreads on Charles Schwab here, but you can review how to buy call debit spreads on Charles Schwab by clicking here.

Here is how to buy a put debit spread (aka a put vertical spread) on Charles Schwab:

Step 1: Open a Schwab Account

If you don't already have a Charles Schwab account, you'll need to sign up for one. Complete the account registration and verification process.
 

Step 2: Log In to Your Schwab Account

Once your account is set up and verified, log in to your Charles Schwab account using your credentials.
 

Step 3: Access the Trading Platform

After logging in, navigate to the trading platform. Charles Schwab provides a web-based platform and mobile app, among other options.
 

Step 4: Find the Underlying Stock

Using the platform's search function or by browsing available options, find the underlying stock for which you want to buy a put debit spread. Once you select the stock, you'll be able to view its trading details and options.
 

Step 5: Select the Put Option for the Long Leg

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

Step 6: Choose the Put Option for the Short Leg

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

Step 7: Set the Number of Contracts and Review Order Details

In the order tickets for both the long and short put options, specify the number of contracts you want to trade. Review the order details, including the strike prices and expiration dates of both options, to ensure they align with your desired put debit spread strategy.
 

Step 8: Place the Trade

Once you've reviewed all the order details and are satisfied with your selections, click the appropriate button to place the trade. Follow any additional prompts or confirmations to complete the trade.
 

Step 9: Monitor Your Position

After placing the put debit spread trade, you can monitor it within your Charles Schwab account. Keep track of the trade's performance and manage it according to your investment strategy.
 
Remember, options trading involves risks, and it's essential to have a good understanding of options strategies and associated risks before engaging in such trades. If you're new to options or need further guidance, consider seeking advice from a qualified financial advisor or utilizing Charles Schwab's educational resources and support.

 

Learn better through video? Here is a great video that we found on YouTube that will visually walk you through placing a put debit spread on Charles Schwab:

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

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI