Bull Call Spread
Moderately bullish
Buy a call, sell a further OTM call against it. Cheaper than a naked call, with capped profit in exchange for a lower breakeven.
Payoff at expiry
Illustrative · NIFTY @ 25000Max Profit
₹4,309
Max Loss
₹3,191
Breakeven
25043
How it's built
Buy one ATM call and sell one call two strikes higher, same expiry, same lot. The premium collected from the short leg partially funds the long leg.
When to deploy it
You're bullish but not betting on a runaway move. You want a cheaper breakeven than a naked long call, and you're comfortable capping the upside at the short strike in exchange.
Worked example
Say NIFTY is trading around 25,000 with a few sessions left before expiry. You buy the 25000 call for ₹109, and you sell the 25100 call for ₹66 — a net debit of ₹3,191 for one lot of 75.
At expiry, the position is worth the most once NIFTY is on the right side of 25043 — up to ₹4,309 per lot. Move against that line instead and the worst case is capped at ₹3,191 per lot, not open-ended.
Mistakes that break this strategy
- Setting the short strike so close to the long strike that the spread barely reduces cost, defeating the point of the trade.
- Treating the max profit at the short strike as guaranteed rather than as a cap that still requires spot to actually get there.
- Forgetting it's still a two-legged position to unwind. Exiting only the long leg leaves a naked short call open by accident.
More bullish strategies
See it read live, not just diagrammed
DeltaK reads Aegis/Zenith wall migration and RRG rotation live across NIFTY, BANKNIFTY, FINNIFTY and MIDCPNIFTY. Sign in and watch it work in Paper mode.