← notes Technique

Credit vs debit is not a choice

Rule

Do not choose a structure on the grounds that it is a credit rather than a debit.

When it applies

Any time the reasoning contains 'collect premium' or 'credit spreads decay in my favour'.

What it means

By put-call parity a bull put spread and a bull call spread at the SAME strikes are synthetically equivalent: same theta, same vega, same risk/reward, differing only by financing. 'Credit spreads have better theta' is false. Choose on strike selection, on which side has the tighter market, and on early-assignment exposure.

Source data/wiki/technique/credit-vs-debit-is-not-a-choice.md