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VeteransModerately Bullish
Long Call Spread
Overview
Also called a 'bull call spread' or 'debit call spread'. You buy a call at a lower strike and sell a call at a higher strike with the same expiration. This reduces cost compared to buying a call alone, but caps upside at the higher strike.
Max Profit
Difference between strikes - Net premium paid
Max Loss
Net premium paid
Breakeven
Lower strike + Net premium paid
Structure
Long 1 lower-strike Call + Short 1 higher-strike Call (same expiry)
Risk Profile
Both profit and loss are limited and defined at entry.
When to Use
When you're moderately bullish and want to reduce the cost of a long call. When you don\'t expect the stock to move significantly above the short call strike. Cost-effective directional play.