The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we're going to answer the question, “How do I close out of a bull call spread?” Closing out of a bull call spread also commonly referred to as a bull debit spread which is an option buying strategy is actually just as simple as reversing the trade. To understand how we reverse the trade, we first need to understand what the core position is of this bull call spread. This spread trade is created by buying one in the money option contract and selling one out of the money option contract both on the call side of the option pricing table. For example, if a stock is trading at $100, you might buy a 99 strike call option and sell a 101 strike call option. This creates a debit and that's why it’s an option buying strategy. Again, this is not necessarily the exact way you have to set them up. This is just how we would set them up if we were trading them here at Option Alpha. If you are long a 99 strike call and short a