Add training workflow, datasets, and runbook
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Bull Call Spread
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A bull call spread is a long call combined with a short call that has a higher
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strike price. Both calls are on the same underlying and share the same
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expiration month. Because the purchased call has a lower strike price, it
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costs more than the call being sold. Establishing the trade results in a debit
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to the trader’s account. Because of this debit, it’s called a debit spread.
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Below is an example of a bull call spread on Apple Inc. (AAPL):
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In this example, Apple is trading around $391. With 40 days until
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February expiration, the trader buys the 395–405 call spread for a net debit
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of $4.40, or $440 in actual cash. Or one could simply say the trader paid
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$4.40 for the 395–405 call.
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Consider the possible outcomes if the spread is held until expiration.
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Exhibit 9.1 shows an at-expiration diagram of the bull call spread.
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EXHIBIT 9.1 AAPL bull call spread.
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Before discussing the greeks, consider the bull call spread from an at-
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expiration perspective. Unlike the long call, which has two possible
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