Bull Call Spread
Description
Buying a lower-strike call and selling a higher-strike call in the same expiry, trading away unlimited upside for a lower cost of entry.
Setup
- Buy one call at a lower strike.
- Sell one call at a higher strike, same expiry.
Context
Used when you expect a moderate rise and want a cheaper, defined-risk alternative to a bare long call.
Risk Profile
Maximum loss is the net debit paid. Maximum gain is the difference between strikes minus that debit, reached once the underlying is at or above the higher strike.
Pros
- Costs less than an outright long call.
- Defined, capped risk.
- Less exposed to a drop in implied volatility than a bare long call.
Cons
- Gain is capped even if the underlying rallies hard.
- Still needs the underlying to clear the lower strike plus net debit to profit.
Effect of Time
Time decay is muted compared to a single long call, since the short call's decay partially offsets the long call's decay.
Effect of Volatility
The spread's net vega is small; a change in implied volatility has a limited effect since both legs move together.
Look-Alike Strategies
Live Structure
| Position | Right | Ratio | Strike | Expiry | Premium | Fill Price | Est. Fee |
|---|---|---|---|---|---|---|---|
| Long | Call | 1 | $84000.0000 | 24 Sep 2026 | $527.5973 | $590.9089 | $25.3247 |
| Short | Call | 1 | $85000.0000 | 24 Sep 2026 | $71.7532 | $59.0909 | $8.9692 |
Estimated Cost to Assemble
An estimate of what entering this structure right now would really cost: filling every leg by crossing the spread (the ask when buying, the bid when selling) instead of at the mid-price, plus an estimated exchange fee. Real fees and fills can differ from this estimate.
Payoff & Greeks vs. Underlying Price
The Greeks curves are a Black-Scholes model using each leg's current implied volatility, holding time to expiry fixed -- not live exchange data at every price, which only exists at the current price (dashed line).
Payoff at Expiration
This structure's value and profit/loss at expiration, at a handful of specific prices: every leg's strike, every breakeven, the current spot, and the chart's own range.
| Underlying Price | Value at Expiration | Profit / Loss | Return on Cost |
|---|---|---|---|
| $83000.0000 | $0.0000 | -$455.8440 | -100.0% |
| $84000.0000 | $0.0000 | -$455.8440 | -100.0% |
| $84415.5600 current | $415.5600 | -$40.2840 | -8.8% |
| $84455.8440 breakeven | $455.8440 | $0.0000 | +0.0% |
| $85000.0000 | $1000.0000 | $544.1560 | +119.4% |
| $86000.0000 | $1000.0000 | $544.1560 | +119.4% |