Strategy · 4 min read
Bull Call Spread (call debit spread)
A bull call spread (call debit spread) buys an ATM or ITM call and sells a further-OTM call to reduce the cost. It is a defined-risk bullish strategy: you pay a net debit and profit when the underlying rises toward the short call.
Structure and payoff
Two legs on the call side:
- Buy ATM/ITM Call — your directional leg
- Sell further-OTM Call — lowers the cost and caps the upside
When to use it
Use it for a controlled bullish view. Max loss is the debit paid; max profit is the strike gap minus the debit. Cheaper than buying a naked call, but the short leg caps how much you can make.
FAQ
How is this different from buying a call?
Selling the further-OTM call lowers your cost and risk, but caps the maximum profit. It is a cheaper, defined-reward way to express a bullish view.
What is the maximum loss?
The net debit paid to open the spread.
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