An option spread which involves buying a call with a given strike price and expiration date while short selling another call with a different strike and expiration date, on the same underlying. For spreads, the type of option is always the same. Therefore, a call spread involves calls, one long (long call) and one short (short call). In general, a call spread position is crated when an equal number of call options are bought and sold at the same time. The maximum profit generated by call spreads is limited when compared with plain call positions, but they are are relatively less expensive to execute. Furthermore, call spreads can be created to profit from all market situations (bull, bear or neutral markets).
Examples of a call spread include: a bear spread, a bull spread, and a calendar spread.
