Call spread

A call spread may be either a bull call spread or a bear call spread, depending on whether the investor expects the underlying price to rise or fall. In the case of a bull call spread, the exercise price of the option sold is higher than the exercise price of the option purchased; since the premium paid for the call option purchased is higher than the premium received for the option sold, the term debit call spread is also used. In the case of a bear call spread, the exercise price of the option sold is lower than the exercise price of the option purchased; since the premium paid for the call option purchased is lower than the premium received for the option sold, the term credit call spread is also used.