The bull call spread: a cheaper way to be bullish, with limits
Buy one call, sell a higher one. Less cost, less decay, and a ceiling on the reward.
Updated 2026-10-07
What a bull call spread is
A bull call spread buys a call at one strike and sells a call at a higher strike, same expiry. The premium from the sold call pays for part of the bought one, so the position costs less than a call on its own. In exchange, gains stop at the higher strike: above it, both calls rise together and cancel out.
Why not just buy the call
A bought call has no ceiling, but it carries the full premium and the full time decay. The spread gives up the ceiling to cut both. Because one leg is bought and one is sold, much of the theta and vega cancels between them, so the spread is less hurt by a slow market or a fall in implied volatility. It suits a view like "up, to about here" rather than "up, a lot".
Choosing the strikes
The bought strike sets where the position starts gaining; the sold strike sets where it stops. A wider gap costs more and can earn more. Strikes closer to the money cost more but need less of a move. The worked example below keeps the bought leg at the money and sells one strike further up, a common starting shape that the strategy builder lets you stretch and compare.
The bearish mirror
The same structure with puts, buying a higher put and selling a lower one, is a bear put spread: a defined-risk way to express a falling view. Both are debit spreads, paid for up front, with the maximum loss equal to what was paid.
A worked example
NIFTY at 24,000, one lot of 65 on each leg. Premiums are illustrative, chosen to be round, not quotes from any session.
- Buy the 24,000 call at 180
- Sell the 24,200 call at 90
- Net premium: a debit of 90 points, or 5,850 rupees per lot.
- Breakeven: 24,090 at expiry.
- Maximum profit: 110 points, or 7,150 rupees per lot.
- Maximum loss: 90 points, or 5,850 rupees per lot.
| NIFTY at expiry | Points | Rupees per lot |
|---|---|---|
| 23,600 | -90 | -5,850 |
| 24,000 | -90 | -5,850 |
| 24,090 | 0 | 0 |
| 24,200 | +110 | +7,150 |
| 24,600 | +110 | +7,150 |
Charges, taxes and slippage come off every line of that table. The strategy builder draws the same payoff as a curve with live premiums, so you can move a strike and watch every number above change.
Questions people ask
What is a bull call spread?
It is buying a call at one strike and selling a call at a higher strike with the same expiry. The sold call lowers the cost of the position and caps the profit at the higher strike, so both the maximum gain and the maximum loss are known at entry.
How do you calculate the breakeven of a bull call spread?
Add the net debit to the bought call's strike. Buying the 24,000 call and selling the 24,200 call for a net debit of 90 points puts the breakeven at 24,090 at expiry.
What is the maximum profit on a bull call spread?
The gap between the two strikes minus the net debit paid. With strikes 200 points apart and a 90-point debit, the most the spread can earn at expiry is 110 points per unit, reached anywhere at or above the higher strike.
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Educational content only: not investment advice. You are responsible for your own trading decisions.