A Bull Call Spread is a strategy designed for investors with a moderately bullish view of the market.This strategy involves buying an "In-the-Money Call Option" (lower strike price) and simultaneously selling an "Out-of-the-Money Call Option" (higher strike price). Both options must share the same underlying asset and expiration date. The primary purpose of this strategy is to lower the overall cost and breakeven point compared to a traditional long call strategy.
The investor benefits if the underlying asset rises, while the downside risk is limited to the net premium paid if the underlying asset declines.
Parameter | Call(Lower Strike) | Call(Higher Strike) | Total |
---|---|---|---|
Option value (Premium) | N/A | N/A | N/A |
Option Payoff | N/A | N/A | N/A |
Profit/Loss | N/A | N/A | N/A |
Delta | N/A | N/A | N/A |
Gamma | N/A | N/A | N/A |
Vega | N/A | N/A | N/A |
Theta | N/A | N/A | N/A |
Rho | N/A | N/A | N/A |