Bull Call Spread
A debit spread that profits from a moderate rise in the stock price. By selling a higher-strike call against your long call, you reduce cost and cap your risk — but also cap your upside.
Payoff Diagram
How to Set Up This Trade
Buy a call at a lower strike price and simultaneously sell a call at a higher strike price, both with the same expiration.
Trade Setup — 2 Legs
When to Use This Strategy
You are moderately bullish and expect the stock to rise to or near the short strike by expiration. Works well in moderate IV environments.
Tips from the Pros
- 1
Choose strike widths that match your risk/reward preference — wider spreads have higher max profit but cost more.
- 2
The stock only needs to reach the short strike for max profit, not go to infinity.
- 3
Close the trade early if you achieve 50-75% of max profit to avoid gamma risk near expiration.
Quick Reference
Max Profit
Difference between strike prices minus the net premium paid (per share).
Max Loss
Limited to the net premium paid (debit).
Breakeven
Lower strike price + net premium paid.
Best IV Environment
Any IV
Time Decay (Theta)
Mixed effect
Risk Level
Low RiskLearn More
Our courses cover this strategy with real trade examples and live market analysis.
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