Learn / Options / Bull call spread
Bull call spread
You buy a call and sell a higher one. The sold call cuts the cost, and it also caps the gain.
By M.M. · Published 5 Nov 2026
What it is
A bull call spread is two calls with the same expiry. You buy the lower strike and sell the higher strike. The call you sell helps pay for the call you buy. What you give up is any stock move past the higher strike.
Held to expiry, the most you can lose is the net debit, the cash you paid at the start. The most you can make is the gap between the strikes, minus that debit. Between the strikes the result moves from a loss toward that cap.
When people use it
People use it when they expect a rise, but not a huge one, and they do not want to pay the full price of a single call. It is a debit trade. The stock has to get through a breakeven above the lower strike, or the debit is lost.
A $100 stock
Take a stock at $100. Volatility is 25 percent, the risk-free rate is 4 percent, and expiry is 30 days out.
Buy the 100 call for $3.02 and sell the 110 call for $0.35.
Below 100 both calls expire and the debit is the loss. Once the stock is through 110 the extra rally belongs to the short call. You pay a net debit of $2.67. At expiry it breaks even at $102.67. The most you can make at expiry is $7.33. The most you can lose at expiry is $2.67.
The model uses one volatility for every strike, a flat risk-free rate, and no dividend. A live option quote will differ. Each contract here covers one share. A listed equity contract usually covers 100 shares.
Risks
If the stock finishes at or below the lower strike, both calls expire and the debit is gone. That full loss is the expiry result. Before expiry, time passing tends to hurt the call you own, and a drop in volatility can cheapen it even if the stock has not fallen much.
The short call can be assigned early once it is in the money. You can end up short shares while the long call is still open. The long call limits the damage. It does not make the assignment free.
Try this plan
The builder below starts on this spread at a $100 stock. Change the ticker or the legs, then copy the share link. The same tool lives at the options payoff builder.
Education only. Prices are theoretical Black-Scholes values, not live option quotes, and this is not investment advice.
Type a ticker to fill the spot from the quote, or enter the spot yourself.
| Leg | Premium | Delta | Theta / day |
|---|---|---|---|
| long 1 call $100.00 / 30d | $3.02 | 0.533 | -$0.053 |
| short 1 call $110.00 / 30d | $0.35 | 0.106 | -$0.023 |
This is a bull call spread. You are long 1 call at $100.00 and short 1 call at $110.00. They all expire in 30 days. The options cost a net debit of $2.67. At expiry it breaks even at $102.67. The most you can make at expiry is $7.33. The most you can lose at expiry is $2.67. Model delta is 0.427. Model theta is -$0.030 per day.
Payoff
At $100.00, expiry P&L -$2.67, today $0.00.
| Stock | At expiry | Today |
|---|---|---|
| $80.00 | -$2.67 | -$2.67 |
| $86.25 | -$2.67 | -$2.61 |
| $92.50 | -$2.67 | -$2.16 |
| $98.75 | -$2.67 | -$0.51 |
| $105.00 | $2.33 | $2.37 |
| $111.25 | $7.33 | $5.09 |
| $117.50 | $7.33 | $6.61 |
| $123.75 | $7.33 | $7.15 |
| $130.00 | $7.33 | $7.27 |
The model uses one volatility for every strike, a flat risk-free rate, and no dividend. A live option quote will differ. Each contract here covers one share. A listed equity contract usually covers 100 shares.