Compare
| Spread | Structure | Max Profit | Max Loss | Best When |
|---|---|---|---|---|
| Bull Call | Buy lower call, sell higher call | Spread width − net debit | Net debit paid | Moderately bullish |
| Bear Put | Buy higher put, sell lower put | Spread width − net debit | Net debit paid | Moderately bearish |
| Bull Put (credit) | Sell higher put, buy lower put | Net credit received | Spread width − credit | Neutral to bullish |
| Bear Call (credit) | Sell lower call, buy higher call | Net credit received | Spread width − credit | Neutral to bearish |
Formula
Bull Call Spread: Max Profit = (High Strike − Low Strike) − Net Debit
Key point
Debit spreads (buy closer strike) pay upfront for a defined payoff. Credit spreads (sell closer strike) collect premium and hope the stock stays away from the sold strike. Both have defined max loss — unlike naked options.
Try it
Price out a bull call spread on a stock you’re bullish on. Compare the cost to buying a single call. The spread costs less but caps your upside at the sold strike.
Check-in
You’re moderately bullish on a stock at $100. A $100/$110 bull call spread costs $4. What’s your breakeven?
Key insight
Check your understanding
Sit with the ideas.
You buy a $50 call for $3.00 and sell a $55 call for $1.50 (bull call spread). What is the maximum profit, maximum loss, and breakeven price?
Why: