Economics Options And Futures Questions
The concept of a bull call spread in options trading involves buying a call option with a lower strike price and simultaneously selling a call option with a higher strike price. This strategy is used when an investor expects the price of the underlying asset to increase moderately. The lower strike call option helps to limit the potential loss, while the higher strike call option helps to offset the cost of the lower strike call option. The maximum profit is achieved when the price of the underlying asset is above the higher strike price at expiration.