The bull call spread
1In one sentence
You buy a call and sell a higher call with the same expiration. The sold call pays for part of the bought one.
It costs less than a call on its own and has a smaller break-even. The trade-off: profit stops at the higher strike.
2Try it: drag the dot
Example: NVDA is $215. You buy the $220 call for $7 and sell the $240 call for $2. Net cost: $5 a share ($500).
33 words to know
Long callbuy $220
The call you buy. It gains as the stock rises above $220.
Short callsell $240
The call you sell. It pays part of the cost and caps your profit at $240.
Net debit$500
What the spread costs in total. It's the most you can lose.
4Watch out
- Profit is capped. Above the higher strike, the two calls cancel out. A huge rally earns the same as reaching $240.
- Both legs expire together. If the stock stays below $220, the whole $500 is lost.
- The short call can be assigned early. It's rare, but if it happens your bought call covers it. Brokers handle it, but it's worth knowing.
5Quick check · 3 questions · optional
Now try it for real
See what the Co-Pilot says today about NVDA, TSLA and 8 more stocks, then drag the dot on a real price.
Common questions
What is a bull call spread?
A bull call spread is buying a call and selling another call with a higher strike and the same expiration. It costs less than a single call, with limited risk and limited profit.
What is the max profit on a bull call spread?
The difference between the two strikes, times 100, minus what the spread cost. It's reached when the stock ends at or above the higher strike.
What is the max loss on a bull call spread?
What you paid for the spread (the net debit). It happens if the stock ends at or below the lower strike.
Education only. Examples use illustrative numbers. Not financial advice; you make your own decisions.