Option Strategy #4: Bull Call Spread

Buy Call A, Sell Call B (Higher Strike Price)

Use the Bull Call Spread if you think the market will go up, but are unsure of how high, or if you think

the market will go up and the straight call option position is very expensive and you want to be able

to get an option with a closer strike price.

The profit is limited to the difference between the strike prices, and at expiration the break even is

equal to the buy side strike price plus the net amount paid for the spread.

The risk is limited to the amount paid for the spread, and the maximum loss is reached if at

expiration the market is below the purchased option leg.

Futures Traders Helping Future Traders