# Bull Call Spread

A Bull Call Spread is an options trading strategy that's used when a trader believes the price of an underlying asset will go up, but not significantly.

A Bull Call Spread or Call Debit Spread is an options trading strategy that's used when a trader believes the price of an underlying asset will go up, but not significantly. It involves buying and selling call options with the same expiration date but different strike prices.

**How It Works:**

**Buy a Call Option:**The trader starts by buying a call option at a specific strike price. This is known as the "lower strike price."**Sell a Call Option:**Simultaneously, the trader sells another call option at a higher strike price. This is known as the "higher strike price."

**Potential Profit and Loss:**

**Maximum Profit:**The difference between the strike prices minus the net premium paid. This profit is realized if the stock closes upon expiration at or above the higher strike price.**Maximum Loss:**Limited to the net premium paid to establish the spread. The loss is incurred if the stock closes upon expiration at or below the lower strike price.

**Benefits:**

**Reduced Cost:**By selling the higher strike call, the trader offsets some of the costs of the lower strike call. This reduces the net outlay and thus the maximum potential loss.**Defined Risk:**Unlike a simple long call position where the potential loss can be significant if the stock goes down, the Bull Call Spread has a clearly defined maximum loss.

**Drawbacks:**

**Capped Profit:**The profit is limited to the difference between the strike prices minus the net premium paid.**Requires Movement:**The stock must move above the lower strike price for the strategy to be profitable.

**Example:**

Let's assume a trader believes Nifty, currently trading at ₹19,996, will rise, but not beyond ₹20,500 within two months. The trader could:

- Buy a 20,000 call option for a premium of ₹365.
- Sell a 20,250 call option for a premium of ₹218.

The net outlay (or maximum loss) is ₹7,350(₹365 - ₹218) X 50 (lot size). If Nifty rises to ₹20250 or higher at expiration, the maximum profit of ₹103 per lot will be realized (₹250 difference between strikes - ₹147 net premium). Total profit would be ₹5,150 (₹103 X 50 (lot size)).

In conclusion, a Bull Call Spread is a popular strategy among options traders who have a moderately bullish outlook on a stock. It allows for profit from a moderate price increase while capping both potential profit and loss.

### Other Strategies

## Iron Condor

A strategy designed to profit from low volatility in the underlying asset, combining a bullish put credit spread and a bearish call credit spread to it.

## Iron Butterfly

This is a strategy which profits from low volatility in the price of the underlying asset while minimizing risk.

## Short Strangle

A short strangle is a non directional trading strategy where an investor sells an (OTM) call option and put option on the same underlying asset simultaneously.

## Short Straddle

A Short straddle is considered neutral or non-directional because it profits from minimal price movement in the underlying asset.

## Put Ratio Backspread

The Put Ratio Backspread strategy involves selling and buying put options in a specific ratio.

## Bear Call Spread

A Bear Call Spread is an options trading strategy that's used when a trader believes the price of an underlying asset will go down, but not significantly.

## Bear Put Spread

A Bear Put Spread is a type of vertical spread strategy used in options trading.

## Long Put

Long Put option is the most basic & simplest strategy. It is recommended or implemented when we expect the underlying asset to show significant downside move.

## Short Call

Short Call strategy is employed in a bearish or neutral market outlook, where the underlying asset's price is expected to remain stable or fall.

## Call Ratio Backspread

The Call Ratio Backspread strategy involves selling and buying call options in a specific ratio.

## Bull Put Spread

A Bull Put Spread is a type of vertical spread strategy used in options trading

## Bull Call Spread

A Bull Call Spread is an options trading strategy that's used when a trader believes the price of an underlying asset will go up, but not significantly.

## Short Put

Short Put strategy is employed in a bullish or neutral market outlook, where the investor believes that the underlying asset's price will remain stable or rise.

## Long Call

Long Call option' is the most basic & simplest strategy. It is recommended or implemented when we expect the underlying asset to show significant upside move.