Bull Call Spread
Low cost, decent profits if the price rises to a certain level
Last updated
Low cost, decent profits if the price rises to a certain level
Last updated
The Bull Call Spread is a strategy that helps you to make a bet on a local price rise while paying less than for an at-the-money call option.
The break-even price will also be lower than in the ATM options as the price should rise just a little higher for the Bull Call Spread to be in-the-money.
This is achieved by simultaneously selling an out-of-the-money call option with a higher strike price when you buy an at-the-money call option, as this is the essence of the Bull Call Spread.
The Bull Call Spread has a limited low cost and capped potential profit.
Buying one Bull Call Spread is equal to buying ATM Call while selling a OTM call with a higher strike price at the same time.
