Call spreads: Bull vs. bear call spreads explained

A call spread combines two calls with the same expiration but different strikes. It can suit a bullish or neutral-to-bearish view, depending on which call you buy and which you sell. Here’s how the two setups compare and where to find Call Spread in the Bybit App.

Key Takeaways:

• A call spread pairs long and short calls with the same expiration and different strikes.

• Bull call spreads usually open for a net debit; bear call spreads usually open for a net credit.

• With matched quantities, both strategies cap profit and loss at expiration, before fees.

What is a call spread?

In a vertical call spread, you buy one call and sell another on the same underlying. They expire on the same date, but each has a different strike.

With matched quantities, the two calls cap both potential profit and loss at expiration.

A call spread may open for a net debit or net credit. A net debit means paid premiums exceed received premiums before fees. A net credit means received premiums exceed paid premiums before fees.

Bull vs. bear call spreads

A bull call spread reduces the cost of buying a call. In exchange, the short higher-strike call caps the maximum profit.

A bear call spread collects a net credit upfront. If the price rises, the long higher-strike call limits how large the loss can become.

How call spread strikes change the trade-off

The gap between the strikes changes the payoff, but the quoted premium matters too. A wider spread is not automatically better.

Consider a hypothetical one-unit bull call spread. A trader buys the 100 USDT call and sells the 120 USDT call. Assume the net debit is 6 USDT. The maximum loss is 6 USDT, while the maximum profit is 14 USDT. The breakeven price is 106 USDT.

Reversing those legs creates a bear call spread. With a 6 USDT credit, its maximum profit is 6 USDT. Its maximum loss is 14 USDT and its breakeven is 106 USDT.

Note: This simplified example assumes matched quantities and excludes fees.

When traders use call spreads

A bull call spread is generally used when you expect the underlying price to rise. A bear call spread suits a neutral-to-bearish view, where you expect the price to fall or stay below a chosen level.

Before expiry, the spread’s value can change with time, implied volatility and market liquidity.

How to access Call Spread on Bybit

Follow this route in the Bybit App:

1. Tap Trade, then select Options

2. Switch from Easy to Pro, then open the Strategies tab

3. Select Call Spread and tap Trade Now

4. Choose whether to buy or sell each call, then set the strikes, expiry and quantities

5. Review the payoff and margin information before submitting the strategy

Note: Under Portfolio Margin, Bybit cannot calculate margin before you submit the order. App labels and availability may vary by account or region.

The bottom line

Call spreads pair a long and short call to cap profit and loss at expiration. Bull call spreads usually cost a debit, while bear call spreads usually collect a credit.

Before placing one, check the strikes, premium, breakeven and payoff limits. For more on trading options, see Bybit Options.

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