Strategy reference
Bull Call Spread
A bull call spread is a two-leg bullish position with capped gain and capped loss. You pay a small net debit for upside exposure between two strikes, capped at the higher strike.
Structure
Buy one call at a lower strike and sell one call at a higher strike, both expiring on the same date. The lower-strike call costs more than the higher-strike call pays, so the position costs you money up front (a net debit).
Payoff at expiration
At expiration, your maximum gain equals the gap between the two strikes minus what you paid up front — and you reach it any time the stock finishes at or above the higher strike. Your maximum loss equals what you paid, which happens if the stock finishes at or below the lower strike. You break even when the stock finishes at the lower strike plus your initial cost.
- Stock price
- $100
- Buy
- 1 × $100 call @ $3.50
- Sell
- 1 × $105 call @ $1.50
- Net cost (debit)
- $2.00
- Max gain
- $3.00 at S ≥ $105
- Max loss
- $2.00 at S ≤ $100
- Breakeven
- $102.00
Frequently asked questions
What is a bull call spread?
A bull call spread is a two-leg bullish position: buy a call at a lower strike and sell a call at a higher strike, both with the same expiration. You pay a net debit up front in exchange for a capped profit between the two strikes.
What is the maximum profit on a bull call spread?
The maximum profit equals the width between the two strikes minus the net debit paid. You realize it at any expiration price at or above the higher strike.
What is the maximum loss on a bull call spread?
The maximum loss equals the net debit paid. It occurs at any expiration price at or below the lower strike.
This page is an educational reference, not investment advice. Numbers in the worked example are approximations for illustration only — real option prices depend on volatility, interest rates, dividends, and time to expiration. See the full disclaimer for details.