Chapter 06 · Section 6.1

Buy a call spread

To buy a call spread means:

a) to buy a call with the lower exercise price and to write a call with the higher exercise price.
Yes. The price spread between the bought and sold call results in a net investment position of $0.90. As we will see later the vertical bull call spread is a good example of a buy call spread. Continue
b) to buy a call with the higher exercise price and to write a call with the lower exercise price.