A bull call spread is built by buying a lower-strike call and selling a higher-strike call with the same expiration. It caps both the gain and the los…
Bets on a rise with capped risk and reward, paying a debit.
Curve at expiration · dashed line = breakeven · gold ticks = strikes
A bull call spread is built by buying a lower-strike call and selling a higher-strike call with the same expiration. It caps both the gain and the loss: you know exactly the most you can make or lose before you enter.
Use it when you expect a moderate rise by expiration, not a moonshot. The short strike funds part of the purchase; in return, profit stops growing above K2.
With the example values already loaded in the calculator above, this strategy returns:
The numbers above come from the same engine as the calculator — change the fields to see your own scenario.
The max loss is the debit paid and happens if the underlying closes below K1. Time works against you while the underlying fails to rise.
Both are bullish. The call version is a debit (you pay, with capped upside); the put version is a credit (you collect the premium). Compare the risk/reward at entry.
Yes. If the underlying closes below K1 at expiration both options expire worthless and you lose the debit paid — which is your known max loss.