In options trading, a bull Debit Spread refers to any Debit Spread in which the value of the spread position increases as the price of the underlying security rises. The simplest way to construct a bull Debit Spread is via calls. See Bull Call Spread.
Before expiration and assignment
The diagrams and worked outcomes describe expiration payoffs, not an option’s market price before expiration. Time decay, implied volatility, rates, dividends and bid-ask spreads affect early closing values. American-style short options can be assigned early; a protective long option is not automatically exercised when a short leg is assigned. Closing or exercising one leg can change the remaining position’s risk.
Payoff summary
Maximum profit: The difference between the two strikes minus the net premium paid.
Maximum loss: The net premium paid.
Breakeven
Lower strike price plus the net premium paid, when that price lies between the strikes.
Amounts are per share before fees. Multiply by the shares covered by the position; standard equity options usually cover 100 shares per contract. If a maximum profit or loss calculation gives a negative amount, use zero. These figures assume matching contracts held to expiration and do not include financing or early assignment.
