Bull Call Spread and Bull Put Spread – Option Trading Strategies

Cole Turner

The bull call spread and the bull put spread are option strategies used when an investor expects the price of the underlying security to increase.


These strategies can be helpful and profitable when used correctly. This article will explain everything there is to know about the bull call spread and bull put spread strategies.

If investors need a reminder of what call and put options are, then click on this article.

A bull call spread is when an investor purchases a call option at a certain strike price while simultaneously selling a call option with the same expiration date, but at a higher strike price. The potential profit from this strategy comes from owning the call option. Selling the other option reduces the cost for the option that is bought.


The maximum profit is the difference in the strike prices between the option bought and the option sold, minus the total cost of both options. As the underlying security’s price increases up to the strike price of the sold option, the profit increases. However, this strategy will not profit further beyond the sold option’s strike price.

Let’s look an example.

Assume a stock is trading at $15. An investor buys one call option with a strike price of $20 for a premium of $1 per share. Simultaneously, he sells one call option with a strike price of $22 for a premium of $0.50 per share. The total cost of the trade is $0.50 (1 – .50 = .50). Assume the underlying stock moves to $24. Any movement above $22 is forfeited. Therefore, the total profit of this trade is $1.50 per share ((22 – 20) – .50 = 1.50).

Exclusive  Introducing Stock Options in Pursuit of Profits

Now let’s look at a bull put spread.


A bull put spread is when an investor purchases a put option at a certain strike price while selling a put option with the same expiration date, but at a higher strike price. In this strategy, the investor hopes that the price of the underlying will be above the higher strike price at expiration.

The put option with the higher strike price is more expensive than the put option with the lower strike price. Essentially, the trader sells the more expensive put option to pay for the less expensive put option. He hopes that both options expire worthless with the rise in the underlying security’s price. If this happens, his total profit is the premium paid to him for selling the put option minus the cost of buying the other put option.

Let’s look at an example of this.

Assume a stock is trading at $80. An investor buys one put option contract with a strike price of $75 for a premium of $3 per share. At the same time, he sells one put option with a strike price of $85 for a premium of $8. Assume the stock price expires at $81. In this case, both options expire worthless. The investor’s total profit would be $5 per share (8 – 3 = 5).

Both of these strategies offer the opportunity to profit when an investor expects the price of the underlying security to increase. These are good strategies to keep in mind when trading options.

share on:

Like This Article?
Now Get Mark's FREE Special Report:
3 Dividend Plays with Sky-High Returns

This newly-released report by a top-20 living economist details three investments that are your best bets for income and appreciation for the rest of the year and beyond.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader


Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor

George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology and its impact on our lives.  He’s an established investor, bestselling author, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

Product Details

  • Technology Report
  • Technology Report PRO
  • Moonshots
  • Private Reserve
  • Millionaire Circle


DayTradeSPY was founded by head trader Hugh Grossman, a retired internal auditor for a Fortune 500 company. After years of first-hand experience trying out one trading strategy after another, Hugh instead developed his own trading system centered around day trading SPY options. That’s it... Nothing else.

Product Details

  • Trading Room
  • Pick of the Day
  • Inner Circle
  • Online Workshops