CALL SPREAD
A strategy that reduces the cost of buying a call option by selling another call at a higher strike price (Bull call spread). This limits potential gain if the underlying goes up, but the premium received from selling the out-of-the-money call partly finances the at-the-money call. A call spread may be advantageous if the purchaser thinks there is only limited upside in the underlying. Alternatively a Bear call spread can be constructed by selling a call option and buying another at a higher strike price.