When Should You Use This Strategy?
You are bullish but want to reduce cost and cap risk
Who Benefits Most?
Traders with limited capital or risk tolerance
Position Setup
The Bull Call Spread consists of the following legs:
- Buy 195 strike call at $8 premium
- Sell 1105 strike call at $3 premium
How Profit and Loss Work
Maximum Profit: Limited: (Upper strike − Lower strike) − Net premium paid
Maximum Loss: Limited: Net premium paid
Break-even Points: Lower strike + Net premium paid
Timing & Time Horizon
30–60 days
Most traders enter this strategy 30–60 days before their expected move, allowing enough time for the position to develop while avoiding excessive time decay on shorter-dated options.
Capital Requirements
Moderate net debit
How to Manage the Position
Close at 50–75% max profit
- Monitor the position daily, especially as it approaches profitability
- Set clear profit targets and exit rules before entering
- Consider closing early to lock in gains rather than waiting for max profit
- Be prepared to cut losses if the thesis is wrong
Key Risks & What to Watch
- Profit capped even if stock rallies beyond upper strike
- Liquidity on both legs matters
Model Before You Trade
Every strategy performs differently based on entry price, strike selection, and premium levels. Use the interactive Bull Call Spread calculator to model the payoff with your expected entry, strikes, and premiums before committing capital.
Educational information only. This guide explains how the strategy works mathematically and typically behaves. It is not investment advice, and past performance does not guarantee future results. Options trading involves significant risk, including the potential loss of premium paid. Paper trade or use small positions while learning.