Market View:
Moderately bullish
Implementation:
Buy a call and sell a higher strike cheaper call to reduce premium
- Buy 1 ATM call option (Leg 1- LS High premium)
- Sell 1 OTM call option (leg 2 - HS Low Premium)
Key trigger points:
- Spread = Difference between the strikes
- Net Debit = Premium Paid - Premium Received
- Breakeven = Lower strike + Net Debit
- Max Profit = Spread - Net Debit (at or above HS)
- Max Loss = Net Debit(at or below LS)