Options Strategies
Bull Call Spread
Strategies Bull Call Spread
Component Buy lower strike price/level call, sell higher strike price/level call of the same month
Potential Profit
  • When the stock price/index level is above the break-even point
  • Limited to the difference between the two strike prices/levels minus the net premium paid
Maximum Loss Net premium paid
Time Value Impact Neutral
Break-even Lower strike price/level plus net premium paid
Remarks As different from a Bull Put Spread which would result in net premium received, a Bull Call Spread would result in net premium paid, as the premium for the lower strike price/level call is higher than that of the higher strike price/level call.
  Net Position +1 May 190 Call -1 May 220 Call

Component Buy ABC May $190 Call, pay $30, and sell ABC May $220 Call, receive $10
Net Premium Pay $30-$10=$20
Break-even $190+$20=$210
Profit when Stock price is above $210
Potential Profit ($220-$190)-$20=$10
Potential Loss $20
Time Value Impact Neutral