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Chapter 3. Vertical Spreads > Bull Call Ladder

3.5. Bull Call Ladder

ProficiencyDirectionVolatilityAsset LegsMax RiskMax RewardStrategy Type
+
    +   
AdvancedNeutralLow Volatility• Long CallUncappedCappedIncome
   • Short Call   
   • Short Call   


3.5.1. Description

The Bull Call Ladder is an extension to the Bull Call Spread. By shorting another call at a higher strike price, the position assumes uncapped risk potential if the stock soars upwards. The problem is that now it's not totally clear if we have a bullish or bearish strategy, so we have to designate it as a direction neutral strategy! We'd love the stock to rise to the middle strike price (the first Short Call) but not above the higher short call strike price. Anywhere in between the middle and higher strike is ideal.


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