SIE practice questioneasySpreads - basics
A bull call spread consists of:
- ASelling a put and buying a call at different strikes
- BSelling a call at a lower strike and buying a call at a higher strike
- CBuying both a put and a call at the same strike
- DBuying a call at a lower strike and selling a call at a higher strike✓ Correct answer
Explanation
Why D — Buying a call at a lower strike and selling a call at a higher strike
A bull call spread buys a lower strike call and sells a higher strike call. The other choices do not define a bull call spread.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Options questions
- What is the maximum loss for a covered call writer?
- An investor believes a stock will be highly volatile but is unsure of the direction. Which two-option strategy is most…
- An investor buys a call with a $30 strike for $2. What is the breakeven stock price at expiration?
- Buying a put option while owning the underlying stock is typically done to: