Chapter 7: Bull Spreads 
SUMMARY 
185 
The bull spread is one of the simplest and most popular forms of spreading. It will 
generally perform best in a moderately bullish environment. A bull spread will not 
widen out to its maximum profit potential right away, though; so for short-term 
trades, the outright purchase of a call is a better choice. The bull spread can also be 
applied for more sophisticated purposes in a far wider range of situations than mere­
ly wanting to attempt to capitalize on a moderate advance by the underlying stock. 
Both call buyers and stock buyers may be able to use bull spreads to "roll down" and 
produce lower break-even points for their positions. The covered writer may also be 
able to use bull spreads as a substitute for covered writes in certain situations in 
which a deeply in-the-money call exists.