Just curious if anyone ever legs in or creates an IC like trade using debit spread instead of credit spreads?
I found myself thinking about this after legging into a 75 delta ditm debit put spread and later decided to put on a similar spread on the other side to neutralize delta. I ended up riding this into expiry and when one side was challenged it was nice being long the outside leg.
This made me look at the whole trade as if I put it on all at once and compare it to a standard IC. When you look at it this way you can see it requires 3x more buying power for similar performance. Not sure that would be worth it as a planned strategy. I'm curious what others think of this. Does anyone start ditm debit spreads to create this as a goal? Thanks!
I found myself thinking about this after legging into a 75 delta ditm debit put spread and later decided to put on a similar spread on the other side to neutralize delta. I ended up riding this into expiry and when one side was challenged it was nice being long the outside leg.
This made me look at the whole trade as if I put it on all at once and compare it to a standard IC. When you look at it this way you can see it requires 3x more buying power for similar performance. Not sure that would be worth it as a planned strategy. I'm curious what others think of this. Does anyone start ditm debit spreads to create this as a goal? Thanks!
