Strategy guide
Bull call spread explained
A bull call spread buys a call at a lower strike and sells a call at a higher strike, both with the same expiration. The short call's premium lowers the cost of the long call, capping both potential profit and loss. It profits from a moderate rise in the stock, with a defined maximum gain and loss set the moment the trade opens.
By Option Ideas Editorial Team · Published September 2, 2026
The formulas
- Max profit (capped)
- (Short strike − long strike) × 100 − net debit paid.
- Max loss (capped)
- The net debit paid, in full -- this is the most the position can lose.
- Breakeven
- Long strike + net debit per share.
- Market view
- Bullish, but not expecting a runaway move -- the short strike is where the thesis "pays off in full."
A worked example
Illustrative numbers, not live quotes -- for that, see the real, current option chain on the ideas page.
| Stock trading at | $100 |
| Buy | 1x $100 call for $5.00 |
| Sell | 1x $110 call for $2.00 — net debit $3.00 ($300) |
| Width | $10 × 100 = $1,000 |
| Max profit | $1,000 − $300 = $700, if the stock closes at or above $110 |
| Max loss | $300, if the stock closes at or below $100 |
| Breakeven | $100 + $3.00 = $103 |
Bull call spread vs. a plain long call
| Trait | Long call alone | Bull call spread |
|---|---|---|
| Cost | Full premium, e.g. $500 | Reduced by the short call's premium, e.g. $300 |
| Max profit | Unlimited | Capped at the width minus the debit |
| Breakeven | Higher (full premium to overcome) | Lower (only the net debit to overcome) |
Risks and assumptions
- Debit paid is at risk in full if the stock closes at or below the long strike at expiration.
- The short call caps upside above its strike -- a strong rally does not add extra profit past that point.
- Both legs need a real, liquid market to enter and exit at a fair price; a wide bid/ask spread on either leg erodes the edge the structure is meant to provide.
FAQ
Why buy a spread instead of just the call?
The short call's premium partially pays for the long call, lowering the cost and the breakeven price -- at the cost of capping how much the position can make above the short strike.
What happens if the stock finishes between the two strikes?
The long call has intrinsic value, the short call expires worthless, and the position is worth the difference between the stock price and the long strike, up to the width of the spread.
Is a bull call spread the same as a covered call?
No. A covered call sells a call against 100 shares you already own. A bull call spread owns no stock at all -- both legs are options, bought and sold together as one position.
Primary references
Not hyperlinked deliberately -- verify current material directly on each organization's own site.
- The Options Clearing Corporation (OCC)
- Cboe Options Institute