Bull Call Spread
The bull call spread is a vertical spread options strategy used when an investor expects a moderate increase in the price of the underlying asset. It involves:
- Buying a call option at a lower strike price.
- Selling a call option at a higher strike price.
- Both options having the same expiration date.
- Net debit paid upfront, creating a limited-profit, limited-risk scenario.
This strategy profits from an increase in the underlying asset's price up to the strike price of the short call option, beyond which losses are limited.