Walk through a bull call spread from entry to expiration across prices below, between and above its two strikes.
Set up the example
Assume shares trade at $100. Buy the 100 call for $5.50 and sell the 110 call for $2.00. The spread costs $3.50, or $350 for one standard contract spread.
Below the long strike
If the stock finishes below $100, both calls expire worthless and the $350 debit is lost. Between $100 and $103.50, the long call has intrinsic value but not enough to recover the full debit.
Between the strikes
At $106, the long call is worth $6 and the short call expires worthless. The spread value is $600, creating a $250 expiration profit after subtracting the original $350 debit.
Above the short strike
At $110 or higher, the spread is worth its full $10 width. Maximum expiration profit is $650. Additional stock upside no longer increases the spread's intrinsic value.
A practical example
At expiration prices of $95, $103.50, $106 and $115, the spread's P&L is approximately −$350, $0, +$250 and +$650 respectively, before costs.
This simplified example focuses on the spread at a specific moment and expiration outcome. Live option prices also reflect the underlying price, time decay, rates, dividends, liquidity and transaction costs. Greeks are theoretical estimates, not guarantees.
Frequently asked questions
What happens at $105?
The spread is worth $5 at expiration, producing $150 profit after a $3.50 debit.
Why is profit capped above $110?
Gains on the long call are offset by losses on the short call.
Can the spread be closed early?
Yes. Sell the spread using a closing multi-leg order.
Continue the Bull Call Spreads cluster
Explore related guides: How to Choose Bull Call Spread Strikes · Bull Call Spread vs Covered Call · How to Adjust a Bull Call Spread. For a structured sequence, use the free Level 9 – Bull Call Spread Strategy course.
Options involve risk and are not suitable for every investor. This material is educational and is not investment, tax or legal advice. Greeks are theoretical estimates, and contract terms and broker requirements can vary.