A limited-risk, limited-reward bullish vertical spread. Combining a long and short call, it limits both the upside & the downside.
Alias
Long Call Spread, Vertical Spread
Description
A bull call spread is an options trading strategy that involves buying call options on a stock while also selling the same number of call options on the same stock with a higher strike price. The strategy aims to profit from an upward price movement in the underlying stock.
The goal of a bull call spread is to profit from a rise in the price of the underlying asset. The trader earns a profit if the price of the underlying asset at expiration is above the higher strike price of the short call option. The maximum profit is achieved when the underlying asset’s price is equal to the higher strike price of the short call option, and the maximum loss is equal to the difference between the strike prices of the long and short call options, minus the premium received from the sale of the short call option.
Breakeven
Leg 1 plus net debit for spreads paid
Sweet Spot
Stock to be at or above Leg 2 at expiration.
Max Profit
Profit is limited to the difference between Leg 1 and Leg 2 minus the net debit paid.
Max Loss
Limited Risk to the net debit paid.
