Bull spread

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Options speculation.

A composite speculative deal in two options, which results in a profit/loss profile similar to a conventional call option, except that the upside potential is capped in return for a reduction in the net premium payable.

A bull spread can be constructed using call options by buying a call with a given strike price, and selling an otherwise identical call with a higher strike price. It can also be constructed using appropriate put options.

Sometimes known as a 'risk reversal'.

See also