This Bull Call is a bullish vertical option strategy where the maximum possible gain is about equal to the maximum possible loss.


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Strategy: Bull Call , (1 strike down to 1 strike up)

a.k.a. Bull Call Spread, Bull Call Vertical

Bull Call Option Graph

The Outlook: Bullish. The stock must rise to show any significant gain.

The Trade: buy Call ITM and sell Call OTM, same distance from current stock price.

Gains when: stock rises.

Maximum Gain: difference in strike prices - initial debit.

Loses when: stock falls, or does not rise.

Maximum Loss : limited to the initial debit.

Breakeven Calculation: Long Call strike + initial debit.

Advantages compared to stock: limited risk, less capital needed, greater leverage.

Disadvantages compared to stock: gains are limited to the upside if stock rises beyond the sold strike, no dividends.

Volatility: after entry, increasing implied volatility is positive if the stock falls, but negative if the stock rises.

Time: after entry, the passage of time is positive if the stock rises, but negative if the stock falls.

Margin Requirement: None. The initial debit must be paid in full.

Variations: see the Vertical Spread Strategies page and the All Bull Call debit spread graphs page.

Synthetic Equivalent: Long Stock plus Long Put at the lower strike plus Short Call at the higher strike. (A "collar".)


  • This Bull Call can be used if you are bullish on a stock, but want to have a better chance of a gain than buying an ATM Long Call. The ATM Long Call must rise by the amount of the debit, this Bull Call has a gain with any rise in the stock price.
  • The short call(s) will limit gains to the upside, so you don't want to be "too" bullish.
  • Over the range of strike prices used, the position will gain or lose a dollar amount nearly the same as holding a stock position of the equivalent number of shares. This significantly increases your leverage on the money invested.


  • Since this is a bullish position, the trader is expecting the stock to rise. If the stock falls instead, the trader would be wise to cut his losses short. Using the example graph, if the stock drops to about $47.50 at any time, the loss would be about $200, and it is probably best to take it. Just sitting and waiting could likely result in the maximum loss of more than twice that amount.
  • If the stock rises most of the way to the sold strike, the trader should stick with the position. As the option graph shows, just the passage of time is a benefit at any stock price near the sold strike.
  • If the stock rises over the strike you sold and you do not trade out of the position before expiration, it is possible to have an automatic exercise on the long call, so you will buy the stock at the lower strike, and also have an automatic exercise on the short call, so you will sell the stock short at the higher strike. See the Rules, Tips, & Techniques page for more.


  • It is not usually recommended to adjust one part of a Bull Call. If you take a trading profit on the short calls if the stock drops for instance, you are actually increasing your maximum risk. You might think you will sell the calls again the next time the stock goes up, but what if it doesn't?
  • It is possible to roll the entire bull call to lower strike prices if the stock drops, but that really amounts to closing one trade at a loss and opening another trade in hopes of a gain. Plus, the stock has not behaved bullishly yet you are taking a second bullish position.
  • If a bull call works out better than you expected and you want to stick with the stock, you can buy back the short calls, and exercise the long calls, so that you end up with just stock, with all the inherent risks and rewards.
  • Or if the stock rises to near the sold call strike with expiration near and you have made 80% or so of the total possible on the short calls, you can roll the position out to the next month, using higher strike prices, if you are still bullish on the stock.

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