Bull Call Spread Calculator

Bull Call Spread

A bull call spread is a defined-risk options strategy used when you are moderately bullish on a stock. You buy a call at a lower strike (K1) and sell a call at a higher strike (K2) with the same expiration. The premium received for the sold call reduces the cost of the bought call.

Key levels:

P&L at expiration:

• Stock at or below K1: Full net premium lost (max loss)
• Stock between K1 and K2: Partial profit: P&L = (S - K1 - Net premium) × 100
• Stock at or above K2: Maximum profit locked in

Example:

• Buy 150 call at $8.00, sell 160 call at $3.00
• Net premium = $8.00 - $3.00 = $5.00 per share ($500 per contract)
• Breakeven = 150 + 5 = $155
• Max profit = (160 - 150 - 5) × 100 = $500 per contract
• Max loss = $500 per contract

Why use a bull call spread instead of buying a call outright?

• Costs less: the sold call offsets part of the premium
• Defined risk and defined reward: you know your max loss upfront
• Tradeoff: you cap your upside at K2, giving up gains above that level

When to use it:

• Moderately bullish: you expect the stock to rise but not dramatically
• Implied volatility is high: selling a call helps offset expensive premiums
• You want defined risk rather than unlimited upside

This strategy has a maximum risk-to-reward ratio that is known before entry.