In the Trade Finder, a vertical debit spread using calls only. This is a net debit transaction established by buying a call and selling another call at a higher strike price, on the same underlying, in the same expiration. It is a directional trade where the maximum loss = the debit paid, and the maximum profit = the difference between the strike prices, less the debit. No margin is required.
Buying a call option and selling another call option, both with the same expiry date. The call option sold usually has the higher strike price. The money paid buying the call option, is offset with the money received for selling the other call option. Losses are capped, as are profits.
A strategy in which a trader buys a lower strike call and sells a higher strike call to create a trade with limited profit and limited risk. A rise in the price of the underlying increases the value of the spread. Net debit transaction; Maximum loss = debit; Maximum gain = difference between strike prices less the debit; no margin.
A spread designed to take advantage of rising asset prices by selling a call option with a low exercise price and buying one with a high exercise price.
a debit spread created by purchasing a lower
an effective method of hedging your option investments
an option strategy in which a call is purchased and a higher strike price call is sold
The purchase of a call with a low strike price against the sale of a call with a higher strike price; prices are expected to rise. The maximum potential profit is calculated as follows: (high strike price - low strike price) - net premium cost, where net premium cost = premiums paid - premiums received. The maximum possible loss is the net premium cost.
A bull call spread is a bullish, vertical spread options strategy that is established by buying an at-the-money call while simultaneously writing a higher striking out-of-the-money call of the same underlying security and expiration month.