As opposed to what the name implies, it is a naturally bearish option trading strategy which extends a bull call spread by selling another call with a higher strike price. Adding another short call to this limited-profit strategy exposes investors to unlimited risk in the event the underlying asset makes a dramatic upward move. A bull call ladder is generally used when the underlying asset is expected to experience limited volatility in the short term. This strategy is usually established by buying an in-the-money call, selling an at-the-money call and selling a higher strike out-of-the-money call. All the call options should have the same underlying and expiration date.
The bull call ladder is also known as a long call ladder.
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