> For the complete documentation index, see [llms.txt](https://guide.laevitas.ch/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://guide.laevitas.ch/option-strategies/bull-diagonal-spread.md).

# Bull Diagonal Spread

## Bull Call Diagonal Spread

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A Bull Call Diagonal Spread is done with a purchase of a longer dated out-of-the-money Call option and sale of a shorter dated out-of-the-money Call option, both which have different strike prices.
{% endhint %}

**Payoff Diagram:**

![](/files/Dyj61p9vREtBHJcEJNq2)

**Direction Assumption:** Neutral-Bullish

**Maximum Profit at Near-Dated Expiration:** Credit received from selling Call + Profit of Long Call\
Maximum profit at the near-dated expiration is realized when the underlying is at the Short Call strike price.\
\
**Maximum Profit at Far-Dated Expiration:** Unlimited<br>

**Maximum Loss at Near-Dated Expiration::** Unlimited\
\
**Maximum Loss at Far-Dated Expiration:** Limited to the debit paid for the Long Call.\
Maximum loss at the far-dated expiration is realized if the underlying moves below the Long Call strike price.

**Breakeven Price at Far-Dated Expiration:** Equal to the Long Call Strike Price + Premium paid

**Theta:** Passage of Time -> Positive Effect\
The net effect of time decay is positive. It will erode the value of the Short Call in a bigger extent than the Long Call.

**Volatility:** Positive Effect