EXAMPLE
Bull call debit spread
Illustrative example
- Underlying
- $100.00
- Entry debit before fees
- $230
- Breakeven
- $102.31
- Max profit
- $268.7
- Max loss
- -$231.3
- Expires
- 2026-10-16
Premium strategy tool
Bull Call Debit Spread Screener
A bull call debit spread buys a lower-strike call and sells a higher-strike call in the same expiration. You pay a debit and profit if the stock rises, up to the higher strike.
The debit is also the maximum loss, which makes it a defined-risk way to express a bullish view at lower cost than a single call.
Product preview
The chart below is the same payoff component used inside the platform, run on the hypothetical example described later on this page.
Bull call debit spread
Buy a call and sell a higher call: pay a debit, with gain and loss both limited.
Illustrative example
- Buy$100 call
- Sell$105 call
Profit zoneLoss zoneStock priceBreakeven
- Example stock
- $100.00
- Entry debit before fees
- $230
- Breakeven
- $102.31
- Max profit
- $268.7
- Max loss
- -$231.3
- Evaluated at
- Expiration
Includes $0.65 entry commission per option contract. Exit, exercise/assignment fees and taxes are excluded.
Payoff scenario
Illustrative example, read-only. Hypothetical inputs run through TradingSignalAI's payoff model.
Illustrative example
- Hypothetical underlying
- $100.00
- Entry debit before fees
- $230 ($2.30/share)
- Position · standard 100-share contracts
- Buy $100 call · sell $105 call
Expiration payoff
1 structure · 100 shares per option leg · expires 2026-10-16
Hover, touch, or focus the chart and use arrow keys to read P/L at a price.
- Shaded above $0: profit
- Shaded below $0: loss
- Solid line: P/L at expiration
- Dashed line: reference price
- Circle: break-even
- Dotted line: strike (values below)
- Break-even
- $102.31
- Strikes
- $100.00, $105.00
- Payoff profit cap
- $268.7
- Max loss
- $231.3
The chart shows underlying prices from $88.00 to $117.00 only. Losses or gains outside this window can be larger; the window's lowest and highest points are not maximum risk.
Includes $0.65 entry commission per option contract. Exit, exercise/assignment fees and taxes are excluded.
Move the pointer or focus the chart and use the left and right arrow keys to read profit or loss at each stock price. These are not live quotes or signals.
Metrics in pictures
Implied volatility: the range the market prices in
Example: $100 stock, 30 days to expiration. One-standard-deviation move = stock x IV x sqrt(days / 365).
Illustrative example
- Lower IV 20%+/- $5.73
Smaller expected range, lower premium for the same strike and expiration.
- Typical IV 30%+/- $8.6
A middle reading for this example.
- Higher IV 50%+/- $14.33
Wider expected range and larger premium, with more risk of a large move.
Bars span the one-standard-deviation range around the stock price. Not a forecast. IV rank in the product uses a realized-volatility proxy, not a historical implied-volatility rank.
Delta: directional exposure
Select a delta to see what it means for one call contract.
Illustrative example
Out of the money, delta 0.30
Moderate sensitivity. Sold options here collect more premium than at 0.15 and are more likely to finish in the money.
One standard contract has about 30 shares of price exposure: roughly $30.00 per small $1 stock move, or $0.30 per quoted share, with other inputs held constant.
Delta is a model sensitivity, not a probability forecast. Values shown are examples, not quotes.
How the bull call debit spreads tool works
- The finder pairs a long call with a higher short call in the same expiration.
- Pairs are screened for liquidity and compared on debit, breakeven and return on risk.
- The chart shows the profit cap at the short strike and the loss limit at the long strike.
- Check both legs' spreads, because two-legged execution costs matter on small debits.
Metrics you will see
| Metric | Meaning |
|---|---|
| Net debit | Long call ask minus short call bid. |
| Maximum loss | Net debit times 100. |
| Maximum profit | (Width - debit) x 100. |
| Breakeven | Long strike plus debit. |
| Return on risk | Maximum profit over debit. |
Worked example
Hypothetical example for a stock trading at $100. Not a quote, a recommendation or a result. Buy the $100 call and sell the $105 call for a $2.30 debit.
| Item | Calculation |
|---|---|
| Maximum loss | $2.30 x 100 = $230 at or below $100 |
| Maximum profit | ($5.00 - $2.30) x 100 = $270 at or above $105 |
| Breakeven | $100 + $2.30 = $102.30 |
| Return on risk | $270 / $230 = 117% |
A higher return on risk usually implies a lower chance of reaching the maximum. The stock must rise more than 2.3% before any profit at expiration.
Risks to understand
- The entire debit can be lost if the stock does not finish above the long strike.
- Profit is capped at the short strike regardless of how far the stock rises.
- Time decay works against the position before expiration when the stock is below breakeven.
- The short call can be assigned early, and execution costs can be significant on tight debits.
Access
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Frequently asked questions
Learn more
- Intrinsic Value: Calls, Puts & MoneynessCalculate call and put intrinsic value with simple formulas and examples. Distinguish immediate exercise value from the option's quoted market premium.
- Options Delta: Sensitivity, Not a GuaranteeLearn what delta measures, how call and put deltas differ, and why a delta-based probability estimate is not a guaranteed assignment or profit forecast.
- Options Greeks: Delta, Gamma, Theta & VegaUnderstand option-price sensitivities with practical examples. Learn how delta, gamma, theta and vega interact rather than relying on a single metric.
- Options Expiration, DTE & Return ComparisonsUnderstand days to expiration, exercise and assignment timing, and why normalized or annualized returns are comparisons rather than income promises.
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Research the trade before you place it
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