Call Spreads (Vertical)

What this video covers

• How a bull call spread is built (buy lower strike call, sell higher strike call) and why it nets to a debit
• How a bear call spread is built (sell lower strike call, buy higher strike call) and why it nets to a credit
• The universal vertical call spread breakeven: lower strike plus net premium
• Why max loss on a debit call spread is capped at the net debit paid, and max gain on a credit call spread is capped at the net credit received
• How to compute max gain on a bull call spread and max loss on a bear call spread using (high strike minus low strike) minus net premium
• Why the bull and bear call spreads with identical strikes share the exact same breakeven but want opposite stock movement
• The golden rule that debit spreads want movement and credit spreads want stillness, and how it solves the most common exam traps