Bull Call Spread option strategy
Bull Call Spread is a bullish strategy that is executed by buying a call and selling higher strike call to fund it. It is a net debit strategy with limited risk to limited reward.
Payoff at expiry
Nifty, lot size 65 · Nifty future 22,650 · 6 Oct 2026Legs
| Action | Option | Strike | Lots | Qty | Premium |
|---|---|---|---|---|---|
| BUY | ATM Call | 22,650 | 1 | 65 | ₹135.47 |
| SELL | OTM Call | 22,700 | 1 | 65 | ₹112.10 |
How it works
- Buy 1 ATM call at the 22,650 strike for ₹135.47, paying the premium.
- Sell 1 OTM call at the 22,700 strike for ₹112.10, collecting the premium.
- You pay a net ₹1,519 upfront for the position. This is the most you can lose.
Below 22,673 you lose, up to ₹1,519.
Above 22,673 you profit, up to ₹1,731.
Set-up: Buy 1 lot ATM call and Sell 1 lot OTM call.
What happens if Nifty moves
Profit or loss at expiry| Nifty at expiry | Move | Profit / loss |
|---|---|---|
| 21,300 | −6% | −₹1,519 |
| 21,950 | −3% | −₹1,519 |
| 22,400 | −1% | −₹1,519 |
| 22,650 | Unchanged | −₹1,519 |
| 22,900 | +1% | +₹1,731 |
| 23,350 | +3% | +₹1,731 |
| 24,000 | +6% | +₹1,731 |
How the Greeks affect it
When to use
Bull Call spread is executed when we have bullish outlook in Stock/ Index. Instead of buying naked call with higher outflow, one sells higher strike Call to partially fund the outflow resulting in hedged strategy.
- Helps to participate in a bullish stock with relatively low cost.
- Reduced risk, cost, and breakeven point for a medium- to long-term bullish trade as compared to buying a call alone.
- Capped downside (although still 100% of the outlay).
Things to watch
- Capped profit if the stock closes above short Call.
- Identifying clear area of resistance and selection of strike becomes very important.
Bull Call Spread: questions
What is a Bull Call Spread strategy?
Bull Call Spread is a bullish strategy that is executed by buying a call and selling higher strike call to fund it. It is a net debit strategy with limited risk to limited reward.
When should you use a Bull Call Spread?
Bull Call spread is executed when we have bullish outlook in Stock/ Index. Instead of buying naked call with higher outflow, one sells higher strike Call to partially fund the outflow resulting in hedged strategy.
How do you set up a Bull Call Spread?
Buy 1 lot ATM call and Sell 1 lot OTM call.
What is the maximum profit of a Bull Call Spread?
Maximum reward is limited to difference in strike less net outflow. Maximum Profit arises if the stock closes at or above the higher strike. Identifying clear uptrend is essential for the strategy.
What is the maximum loss of a Bull Call Spread?
Maximum risk is limited to difference in cost of long and short call. Breakeven for the strategy would be lower strike + net outflow.
What is the breakeven of a Bull Call Spread?
With Nifty at 22,650, the example on this page breaks even at 22,673 at expiry.