An option strategy that attempts to maximize profits in bullish markets, i.e., when the prices of the underlying securities go up. This strategy involves buying a call with a lower exercise price and simultaneously selling a call with a higher exercise price.

Alternatively, it could involve buying (long) a put with a lower exercise price and simultaneously selling a put with a higher exercise price. The sold (short) option would expire out-of-the-money, securing the premium for the option writer. However, if the expected increase in prices didn’t materialize, the option writer would incur losses on his position.