Bull Call Spread
Long Call Vertical · Debit Call Spread
Overview
A bull call spread expresses a measured upside view. You buy a call at a lower strike and finance part of its cost by selling a call at a higher strike of the same expiry. The premium you collect on the short call subsidises the long call, so the position costs less than an outright call — and that lower cost is exactly what caps the upside.
Both the maximum gain and the maximum loss are fixed the moment you enter. This makes the structure a clean way to trade a target: you are paying a known amount to participate in a defined band of upside, with no tail risk beyond the debit.
How it’s built
Buy 1 lower-strike call (near or at the money) and sell 1 higher-strike call, same underlying and same expiry. The gap between the strikes is the spread width; your risk and reward both live inside it.
| Action | Option | Strike | Premium | Role |
|---|---|---|---|---|
| Buy | Call (CE) | 24,000 | 180 | Buy — primary directional leg |
| Sell | Call (CE) | 24,200 | 90 | Sell — finances the long call |
Payoff at expiry
The diagram is computed from the legs above on an illustrative NIFTY 50 snapshot — spot 24,000, one lot of 75.
Worked example — NIFTY 50
NIFTY trades at 24,000 and you expect a grind towards 24,200 into expiry, but not a runaway rally. You buy the 24,000 call for 180 points and sell the 24,200 call for 90, paying a net debit of 90 points (₹6,750 for one lot of 75).
Above 24,200 both calls are in the money and the spread is worth its full 200-point width — your gain is the width minus what you paid. Below 24,000 both expire worthless and you lose only the 90-point debit. The trade simply needs NIFTY above 24,090 at expiry to turn a profit.
At expiry
| If the market… | Outcome |
|---|---|
| NIFTY closes ≥ 24,200 | Full profit — spread at maximum value |
| NIFTY closes at 24,090 | Breakeven — gains offset the debit |
| NIFTY closes ≤ 24,000 | Maximum loss — limited to the debit paid |
Greeks & behaviour
When to use it
- You have a defined upside target and a level you do not expect price to exceed.
- You want long-call exposure but find the outright premium and time decay too expensive.
- You want a known, capped loss rather than open-ended risk.
Risks & caveats
- Profit is capped above the short strike — a powerful rally earns no more than the spread width.
- A sideways or falling market still erodes the debit through time decay.
- Both legs share an expiry; an early but late-fading move can still finish out of the money.
Key takeaways
- A cheaper, risk-defined substitute for buying a call outright.
- Maximum profit, maximum loss and breakeven are all fixed at entry.
- Best deployed for a measured move to a specific level, not an explosive breakout.
Test this on live data
Load the Bull Call Spread preset in the Strategy Builder to see real strikes, premiums and a live payoff graph.
Educational content only — not investment advice or a recommendation. All strikes, premiums and figures are illustrative and do not reflect live market quotes. Options carry significant risk; consult a registered adviser before trading.