What is the maximum gain for a debit spread?

The maximum gain for a debit spread is determined by the difference between the strike prices of the options involved in the spread, minus the net premium paid to establish the position. In a debit spread, an investor pays a premium for the long position and receives a lower premium for the short position.

To calculate the maximum gain, you first find the difference in strike prices, which represents the potential maximum profit if the underlying asset moves favorably. Then, subtract the net premium (the amount paid to enter the spread) to arrive at the actual maximum gain. This captures the idea that while the spread has a defined profit potential, the cost incurred to enter the position must be accounted for, as it reduces the overall gain.

Thus, the correct answer accurately reflects the mechanics of a debit spread and how to calculate the maximum profit from such a strategy.