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Options Strategies 1: Call spread (Call debit spread)

1: When use this strategy?
when you predict that the stock price will increase before the expire date

 2: How to construct this spread?

a: buy (long) a in-the-money (ITM) call
b: sell (short) a out-of-the-money (OTM) call
c: the above two calls should expire at the same date

Graph showing the expected profit or loss for the bull call spread option strategy in relation to the market price of the underlying security on option expiration date.

3: Limit Gain and Limit Risk
See the above (Please note that the x axis is the strike price)

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