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Bull Call Spread
What Is a Bull Call Spread? A Bull Call Spread is an options trading strategy designed to benefit from a stock's limited increase in price. A Bull Call Spread strategy involves taking two positions of buying a Call Option and selling a Call Option. When to use Bull Call Spread strategy? Moderately Bullish The Trade Buy a call and sell a higher strike cheaper call to reduce the premium. Or you can Buy ITM Call Option and Sell OTM Call Option. Pros • Cheaper than buying a call. • Pay only for the limited upside you want. • Less Theta and lower IV risk. Time and Volatility • Loses a little time value every day • Gains moderately if IV goes up Max Loss: Net premium Max Profit: Strike difference - Net premium
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