24th June 2022

Bull call spread – Options trading strategy

A Bull Call Spread (or Bull Call Debit Spread) strategy is implied for investors who are moderately bullish on the market and are anticipating a mild rise in the price of the underlying stock. It is a directional strategy

A bull call spread consists of one long call with a lower strike price and one short call with a higher strike price. Both have the same stock and expiry date. In this strategy profit & loss were predefined. 

The cost of placing the sell order will be low because of the long position we had already

Bull Call Spread – Maximum profits

In the bull call spread options strategy, the maximum profits are calculated as below

  • Maximum Profit  = spread -net debit

Where Spread is the difference between the higher and lower strike price and Net debit is the premium paid for lower strike price-premium received

  • Maximum Profit Gained When Price of Underlying >= Strike Price of Short Call

Bull Call Spread – Limited Downside risk

In the bull call spread strategy, the maximum loss is calculated as below

  • Maximum Loss = Net debit(premium paid for lower strike price-premium received)
  • Maximum loss occurs when the price of underlying <= Strike Price of Long Calls 

Bull Call Spread – Break-Even Point

This formula can be used to calculate the price at which break-even is gained for the bull call spread position.

  • Break-Even Point = Strike Price of Long Call + Net debit

How to make a Bull call spread Strategy in intraday screener?

Using the Options strategy builder feature in the intraday screener website, you can easily make an option strategy for a bull call spread. Here is the simple step by step process to make bull call spread. 

Step 1: You just need to select the indices and expiry date (one buy call option and one sell call option) and click on add/edit to get started.

bull call spread

Step 2: Click on the Bull call spread strategy below. 

bull call spread

Step 3: You will get detailed information on the option strategy like Premium, Max profit at expiry, Max losses at expiry, Breakeven at expiry and a Bull call spread graph. 

bull call spread

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