Vertical Spread Calculators
Visualize P/L and calculate the max profit, max loss, and breakeven price for any vertical spread.
Bullish Spreads
Use these when you expect the stock to rise or stay above a certain price.
Bull Call Spread
debitBuy a lower strike call, sell a higher strike call. A debit spread that profits when the stock rises through the call strikes.
→Bull Put Spread
creditSell a higher strike put, buy a lower strike put. A credit spread that profits when the stock stays above the short put strike.
→Bearish Spreads
Use these when you expect the stock to fall or stay below a certain price.
Bear Put Spread
debitBuy a higher strike put, sell a lower strike put. A debit spread that profits when the stock falls through the put strikes.
→Bear Call Spread
creditSell a lower strike call, buy a higher strike call. A credit spread that profits when the stock stays below the short call strike.
→What is a Vertical Spread?
A vertical spread is an options strategy that involves buying and selling two options of the same type (both calls or both puts) with the same expiration date but different strike prices. The name "vertical" comes from how options are displayed in an options chain—strikes are listed vertically.
Debit Spreads vs Credit Spreads
Vertical spreads fall into two categories based on whether you pay or receive a premium to enter:
- Debit spreads cost money to enter. You pay a net premium because the option you buy is more expensive than the one you sell. Bull call spreads and bear put spreads are debit spreads.
- Credit spreads pay you to enter. You receive a net premium because the option you sell is more expensive than the one you buy. Bull put spreads and bear call spreads are credit spreads.
Why Trade Vertical Spreads?
Vertical spreads offer defined risk—you know your maximum loss before entering the trade. They also cost less than buying options outright because selling the second leg offsets part of your cost. The tradeoff is capped profit potential, but for many traders this is an acceptable exchange for the reduced cost and clearer risk profile. When buying ATM or OTM debit spreads, the return on capital can often exceed that of buying an outright option at the same strike due to the lower cost and lower breakeven.
How to Use These Calculators
Each calculator lets you input stock price, strike prices, expiration, and either implied volatility or actual option prices. You'll see:
- Max Profit: The most you can make if the trade goes perfectly
- Max Loss: The most you can lose (your defined risk)
- Breakeven: The stock price where you don't make or lose any money at expiration
- P/L Chart: Visual representation of the potential strategy payoff across stock prices
