Bull Call Spread

A defined-risk bullish spread — capped gain, capped loss · payoff at expiration

Worked example

Buy the $100.00 call and sell the $110.00 call for a net $400.00 debit — capital required $400.00. Max profit $600.00, max loss -$400.00, breakeven $104.00.

At expiration: if the stock is at $120.00, the position shows a net P&L of $600.00; if the stock is at $90.00, the position shows a net P&L of -$400.00.

When to use

You expect a moderate rise, not a runaway move — selling the higher call caps the upside but cuts the cost.
You want a cheaper, lower-breakeven bullish position than an outright long call.
You want both your risk and your reward known up front.

Common pitfalls

Your profit is capped above the higher strike — a big rally earns no more than the spread's width minus cost.
You can still lose the entire net debit if the stock finishes below the lower strike.
Time decay and a volatility drop hurt the long leg more than they help the short — manage before expiration.