What is an example of buying a call spread?

Let’s look at an example of buying a call spread. XYZ is trading at 412. An options trader executes buying a call spread by buying a 420 call at 17 and selling a 460 call at 6. The net debit and maximum loss on this trade is 11 (17-6).

What is a bull call spread?

A bull call spread is an options strategy used when a trader is betting that a stock will have a limited increase in its price. The strategy uses two call options to create a range consisting of a lower strike price and an upper strike price. The bullish call spread can limit the losses of owning stock, but it also caps the gains.

What is a calendar call spread?

A calendar or horizontal call spread is created when you buy long term call options and sell near term call options. Both have the same strike price. They differ only in regards to the expiration date . Based on factors such as the near-term outlook, you can use the neutral or bull calendar call spread.

Is a call spread bullish or bearish?

A call spread can be bullish or bearish, depending on the type of spread. A bull call spread is bullish, while a bear call spread is bearish. What is an example of a call debit spread? A call debit spread, or bull call spread, is when you buy a call option with a lower strike price and sell a call option with a higher strike price.