Leaderboard

Remember: it's all about risk/reward. Long call has higher risk higher reward. Bull put spread - lower risk, lower reward. If you structure the put spread with both puts OTM, the stock can move slightly down and you can still make money - as long as it doesn't penetrate the short put.

Long call is Vega positive so IV drop can hurt, and most IVs are elevate right now and IV typically drops when the stock price rises. So a rising stock price and dropping IV can lower profits quite a bit. A bull put spread will benefit from falling IV coupled with a rising stock price. Although a bull put spread has limited profit it can be a safer choice when IV is elevated.

Hi @idk0098, here are some thoughts : 1) Long call is theta negative whereas the bull put is theta positive (ie. the long call would lose money every day and the put spread would gain every day, ignoring any stock movement) 2) Long call is vega positive whereas the put spread is vega negative. If volatility was to drop, then the long call would lose, but put spread would gain - and vice versa. 3) Long call requires that the stock moves up (and quickly) to make a profit, whereas the bull put can make a profit if the stock stays static, or moves up, or even down a little (depending on the short strike). Essentially, to make money for with a long call, the stock has to move up and quickly, whereas with the bull put spread, the stock just has to stay roughly static or rise. With regards to the "unlimited profit" with a long call - yes, it is true, but in this is theoractical only.