An option trading strategy that involves buying a call option at a given strike price and selling a call option at a higher-strike price, both on the same underlying and with the same expiration month. An investor would seek such a strategy when the underlying is expected to trade at or above the lower-strike price and below the higher strike price.
This spread allows an investor to buy the underlying at the lower strike, while still under obligation to sell the underlying at the higher strike if asked to do so by the buyer upon exercise. The maximum potential profit is limited to the difference between the two strike prices minus the net debit amount paid to establish the position.
The long call spread is also called a bull call spread.
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