You are cautiously bullish on the common stock of the Wildwood Corporation over the next several months. The current price of the stock is $50 per share. You want to establish a bullish money spread to help limit the cost of your option position. You find the following option quotes:
-Ignoring commissions,the cost to establish the bull money spread with calls would be _______.
A) $1,050
B) $650
C) $400
D) $400 income rather than cost

Question

You are cautiously bullish on the common stock of the Wildwood Corporation over the next several months. The current price of the stock is $50 per share. You want to establish a bullish money spread to help limit the cost of your option position. You find the following option quotes: 
-Ignoring commissions,the cost to establish the bull money spread with calls would be _______.
A) $1,050 
B) $650 
C) $400 
D) $400 income rather than cost

Quizplus · Accepted Answer

A bull money spread with calls involves buying a call option at a lower strike price and selling a call option at a higher strike price. The cost is the difference in premiums between the two options.

You Are Cautiously Bullish on the Common Stock of the Wildwood