📊

Bull Call Spread

Bullish Strategy

Use Zuviz's free options visualizer to build this strategy instantly. Use Zuviz's free options visualizer to build this strategy instantly. A defined-risk bullish strategy. Buy a call at a lower strike and sell a call at a higher strike to reduce cost and cap your profit potential.

⚡ Key Takeaways

  • Market Outlook: Moderately bullish (expect limited upward move)
  • Max Profit: Difference between strikes - net debit ($7.00 in example)
  • Max Loss: Net debit paid ($3.00 in example = $300/contract)
  • Breakeven: Lower strike + net debit (e.g., $100 + $3 = $103)
  • Best for: Bullish plays with limited capital, reducing cost of long call
  • Greeks Impact: Negative Theta (but less than long call), positive Delta

💡 Visualize this strategy in 10 seconds: Open Zuviz →

Market Outlook
Moderately Bullish
Max Profit
Limited (Width - Debit)
Max Loss
Net Debit Paid
Breakeven
Lower Strike + Debit

📊 Payoff Diagram

Open in Zuviz →

🏗️ Strategy Structure

A Bull Call Spread (aka Call Debit Spread) uses two legs with different strikes.

Leg Action Type Strike Premium
1 Buy Call $100 (Lower) $5.00
2 Sell Call $110 (Higher) $2.00

Net Debit: $5.00 - $2.00 = $3.00 per share ($300 per contract)

🧮 Key Calculations

Max Profit

Achieved when stock closes at or above the higher strike at expiration.

Max Profit = (Higher Strike - Lower Strike) - Net Debit = ($110 - $100) - $3.00 = $7.00/share ($700/contract)

Max Loss

Occurs if stock closes at or below the lower strike at expiration.

Max Loss = Net Debit Paid = $3.00/share ($300/contract)

Breakeven

Breakeven = Lower Strike + Net Debit = $100 + $3.00 = $103.00

🎯 When to Use This Strategy

  • Moderately bullish: You expect the stock to rise but have a target price in mind
  • Reduce cost: Want bullish exposure cheaper than a long call
  • High IV environment: Selling the higher call offsets expensive premiums
  • Defined risk: Know your maximum loss upfront
  • Risk/reward target: Common to aim for 1:2 or 1:3 risk/reward

📈 Greeks Impact

Delta (Δ)

Positive - You want the stock to rise.

Theta (Θ)

Negative (usually) - Time decay hurts long positions, helps short ones.

Vega (ν)

Depends - Long strategies want rising IV, short strategies want falling IV.

⚖️ Pros & Cons

Pros

  • Lower cost than long call
  • Defined risk and reward
  • Better in high IV environments
  • No margin required
  • Lower breakeven than long call

Cons

  • Capped profit potential
  • Doesn't benefit from big moves
  • Two legs = more commissions
  • Less liquid strikes harder to fill
  • Hard to adjust once opened

📝 Real-World Example

Stock: MSFT trading at $400
Strategy: Bull Call Spread, 30 DTE

Leg Action Strike Premium
1 Buy $400 Call $12.00
2 Sell $420 Call $5.00

Net Debit: $12.00 - $5.00 = $7.00/share ($700/contract)
Max Profit: ($420 - $400) - $7.00 = $13.00/share ($1,300/contract)
Breakeven: $400 + $7.00 = $407.00
Risk/Reward: Risk $700 to make $1,300 (1:1.86)

🔗 Related Strategies

📞 Long Call

Unlimited profit but higher cost

💰 Bull Put Spread

Similar bullish outlook, collect credit instead

Visualize This Strategy

See the payoff diagram in Zuviz.

Add to Chrome - Free