Bull Call Spread Calculator
Buy a call and sell a higher-strike call with the same expiry, for a net debit. You profit if the stock rises, with your cost and your profit both capped.
Stock
Call you're buying
Call you're selling
Calendar days to expiry: 30
Manual settings
Left blank, each is worked out from that call's premium (bought call left, sold call right).
Has only a small effect. Leave at 4% if unsure.
Example trade shown. Replace with your own numbers.
Profit / loss by stock price
Profit / loss over time
Values before expiry are estimates using Black-Scholes and each call's implied volatility. Chances use the bought call's volatility. Assumes both calls are held to each date shown and ignores closing fees, dividends and early assignment. For educational purposes only.
What is a Bear Call Spread?
A bear call spread is a way to earn income when you think a stock will stay below a certain price. You sell a call option and, at the same time, buy a call with a higher strike price and the same expiry date. You receive more for the call you sell than you pay for the one you buy, so you collect a net credit up front.
If the stock stays below the strike of the call you sold, both calls expire worthless and you keep the whole credit. The call you buy caps your risk: however high the stock goes, your loss can't be more than the gap between the strikes, minus the credit.
How to use this calculator
1. Enter the stock's current price. Adding the ticker symbol is optional.
2. Enter the call you're selling: its strike price (the lower one) and its premium per share.
3. Enter the call you're buying: its strike price (the higher one) and its premium per share.
4. Set the expiry date, or type the number of days to expiry.
5. Enter how many spreads you're trading and any fees per spread.
The calculator updates as you type. You'll see:
- Your net credit (your maximum profit), maximum loss and break-even price.
- Your return on risk, both for this trade and annualised.
- Your chance of making a profit, of keeping the full credit, and of taking the maximum loss.
- A chart of your profit or loss at different stock prices, today, at two dates in between, and at expiry. Hover over the chart (or tap it on a phone) to read exact values.
- A table of profit or loss by stock price and date, shown in dollars or as a percentage of your maximum loss.
You can find the premiums in your broker's option chain. Use the mid-price between the bid and the ask for a realistic figure. Under "Manual settings" you can enter the implied volatility yourself, change the interest rate, or set the price range shown in the chart and table.
When is a Bear Call Spread a good choice?
- You're neutral to bearish. You don't need the stock to fall, just to stay below your sold strike.
- The stock has struggled to get above a certain price, and you can place your sold strike above that level.
- Implied volatility is higher than usual. Premiums are richer, so you collect a bigger credit for the same risk.
- You want a defined, limited risk. You know your worst case before you place the trade.
- You want time to work for you. As expiry gets closer, the spread loses value, which is good for you as the seller.
When might it not suit?
- The stock is in a strong uptrend, or you expect a big rise.
- There's a big event before expiry, such as an earnings report, that could cause a sharp jump.
- The credit is very small compared with the maximum loss. Check the return on risk and the chance of profit together.
Things to keep in mind
- Above the higher strike at expiry, you take your maximum loss.
- Between the two strikes, the result depends on where the stock finishes. Check the break-even price on the calculator.
- The call you sell can be assigned early, especially just before an ex-dividend date if it's in the money. Your bought call still protects you, but it's worth knowing.
- Many traders close the spread early once most of the credit is captured, rather than waiting for expiry.
This calculator gives estimates for educational purposes only. It isn't financial advice. Option prices before expiry are modelled, and real prices will differ.