Bull Call Spread and Bull Put Spread: Smart Bullish Option Strategies with Defined Risk

In options trading, spread strategies are among the most widely used tools by proprietary desks and professional traders. These structured, two-legged trades form the foundation of many trading desks globally due to their simplicity and defined risk-reward characteristics. 

Among the most common spread types are horizontal spreads and vertical spreads  named based on how the strike prices and expiry dates are selected. This blog focuses on vertical spreads, specifically two bullish strategies: the Bull Call Spread and the  

Bull Put Spread. 

Understanding Vertical and Horizontal Spreads 

Spreads are typically divided into two categories: 

• Horizontal Spreads involve buying and selling options (calls or puts) with different expiries but the same strike price. 

• Vertical Spreads involve two options with the same expiry and underlying asset, but different strike prices. 

While horizontal spreads are used when expecting limited price movement (non-directional), vertical spreads aim to profit from a directional market move. 

Let’s now look in detail at the two vertical spread strategies used in a bullish market outlook. 

Bull Call Spread: A Debit Strategy for Upside Potential 

The Bull Call Spread is a debit spread constructed using call options. It involves: 

• Buying a call option 

• Selling another call with a higher strike price but the same expiry 

Because the call purchased is more expensive, this trade involves a net debit, which also defines the maximum loss. 

Trade Example (Nifty – 29 September Expiry) 

• Buy 17,700 CE @ ₹311.95 

• Sell 18,100 CE @ ₹141.70 

Net Debit = ₹311.95 – ₹141.70 = ₹170.25 
Maximum Loss per lot = ₹170.25 × 50 = ₹8,512.50 

This upfront cost is the maximum you can lose in this strategy. 

Maximum Profit = (18100 – 17700 – 170.25) = ₹229.75 
Profit per lot = ₹229.75 × 50 = ₹11,487.50 

Margin Requirement: ₹17,559 

This strategy is ideal for m.Stock traders expecting a moderate rise in the underlying. 

Bull Put Spread: A Credit Strategy for Bullish Markets 

The Bull Put Spread is a credit spread built using put options. It is created by: 

• Selling a put option 

• Buying a put at a lower strike price, with the same expiry 

Since the sold put has a higher premium than the one bought, the trader receives a net credit, which is the maximum gain from the trade. 

Trade Example (Nifty – 29 September Expiry) 

• Sell 17,900 PE @ ₹463.20 

• Buy 17,500 PE @ ₹275.05 

Net Credit = ₹463.20 – ₹275.05 = ₹188.15 
Maximum Profit per lot = ₹188.15 × 50 = ₹9,407.50 

This is the most you can earn from the trade if Nifty stays above 17,900. 

Maximum Loss = (17900 – 17500 – 188.15) = ₹229.75 
Loss per lot = ₹229.75 × 50 = ₹11,487.50 

Margin Requirement: ₹34,921 

This setup works well for traders who expect the market to stay flat or rise gradually. 

Points to Remember 

• Spread strategies always come with defined risk and reward. 

• Bull Call Spread: Buy lower strike call, sell higher strike call → Debit Strategy 

• Bull Put Spread: Sell higher strike put, buy lower strike put → Credit Strategy 

• Use Bull Call when you’re paying a premium for upside exposure. 

• Use Bull Put when you’re earning a premium with limited downside risk.