Bull Call Spread options strategy
A bull call spread buys a lower-strike call and sells a higher-strike call, creating a defined-risk, defined-reward bullish position at a lower cost than a long call.
How the bull call spread is built
Buy the 200 call for 8 and sell the 210 call for 4, for a net debit of 4.
Profit and loss at expiration
The expiration payoff is calculated as: Profit = max(S − 200, 0) − max(S − 210, 0) − net debit.
- Maximum profit
- Difference between strikes − net debit = (210 − 200) − 4 = $6 per share.
- Maximum loss
- The net debit paid = $4 per share.
- Breakeven
- Lower strike + net debit = 204.
Worked example
At an expiration price of 215, payoff = 10 − 5 − 4 = $1 per share. At 210 or higher, the spread reaches its max.
When to use it
Use it when you are moderately bullish and want to reduce the cost and time decay of a long call by capping the upside.
Managing the risk
Risk is fully defined at the net debit. The trade-off is a capped maximum profit.
Frequently asked questions
Why sell the higher call in a bull call spread?
The premium from the short call offsets part of the long call cost, lowering both breakeven and maximum risk.
Is a bull call spread cheaper than a long call?
Yes — the credit from the short leg reduces the net cost, at the expense of capping the upside.
Model this strategy
Open the free OptCurve calculator to plot the bull call spread payoff, mark breakevens, and overlay it with other strategies.
Open the P&L calculator