Which one of the following is a bull call spread?
A)buying a $20 call and selling a $25 call on the same stock
B)selling a $20 call and buying a $25 call on the same stock
C)buying a $20 call and selling a $15 call on the same stock
D)selling a $20 call and buying a $25 put
E)buying a $20 call and selling a $25 put

Question

Quizplus · Accepted Answer

A bull call spread involves buying a lower strike call option and selling a higher strike call option on the same underlying security, with both options having the same expiration date. Buying a $20 call and selling a $25 call satisfies this criteria and is therefore a bull call spread. Option B is a bear call spread, Option C is a bull put spread, Option D is a collar, and Option E is a bear put spread.

Which One of the Following Is a Bull Call Spread