What does Bull Call Spread strategy means and when it should be used ?

Bull Call Spread is a strategy that allows you to take two positions: buy a Call or sell a Call option. You buy 1 ITM Call Option, and sell 1 OTM Option. You can buy 1 lot at ITM of TCS call option and 1 lot at OTM of TCS call option if the TCS price is expected to rise moderately. If both your Options are exercised, you will realize the highest profit and lose the most if neither of them expire or are cancelled.

When should you use a Bull Call Spread Strategy?

Bull Call Spreads are an option strategy traders use when they're bullish on the market and expect a slight increase in the price of the underwriter. This strategy allows for a small profit or loss.

Max Loss = Net Premium Paid

Maximum Profit= (Strike Prices of Call 1-Strike Prices of Call 2)- Premium

Bullcall Spread Strategy Payoff Graph