Terms Beginning With 'b'

Bull Call Spread

  • January 17, 2020
  • Team Kalkine

It is an options trading strategy in which investors take advantage of the limited increase in the price of a stock. Under this strategy, there are two calls to be made: a short call where a call option is sold at a superior strike price compared to the market, and a long call where a call option is bought at a lesser strike price. The same stock with the same expiration date is considered for both the calls. The percentage of profit is restricted if, in a short call, the price of a stock goes above the strike price. Similarly, loss percentage is restricted if, in a long call,  the stock price falls below the strike price.

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