Bull call spread and bull put spread payoff profiles are inverse tobear put spreadandbear call spread, which as their names suggest are bearish strategies (profit when underlying price goes down). The latter is actually the exact other side of bull call spread (you sell the lower strike call...
Bull Call Spread Payoff Diagram When to put it on A bull call spreae may be out on at varying times based on the trader’s goals, risk tolerance and market conditions. There are, however, a few simple rules of thumb to consider. Because the spread is bullish, it is important to ...
The above diagram represents the payoff of the bull spread strategy. Line AB represents the payoff during the worst-case scenario, i.e., when the underlying security price decreases contrary to the bullish expectation of the trader. Point C represents the breakeven point when the underlying securi...