January 29, 2023

free money? RH call debit spread for 1280 credit and 0 max loss? : options

Hi Reddit,

I am a beginner trader who has been using call debit spreads. I found a spread on RH for a +1,280 credit and I have a few questions.

  • I usually have to pay a premium for call debit spreads but this one is for credit, does it mean it’s “free”?

  • This position has a 0 max loss (never seen it on RH), is it a glitch or does it how it work?

  • If I receive credit after opening this position, can I just close it and keep the profits?

  • To open this position, do I need a margin account or collateral? I only have $500 in buying power.

Thanks everyone!

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