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Using a Bull Call Spread

Using a Bull Call Spread. When to Use a Bull Call Spread. When the marketer is bullish on a market up to a point Hedge an input cost such as corn Regain ownership of a commodity once the commodity has been sold on the cash market or forward contract. How a Bull Call Spread Works.

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Using a Bull Call Spread

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  1. Using a Bull Call Spread

  2. When to Use a Bull Call Spread • When the marketer is bullish on a market up to a point • Hedge an input cost such as corn • Regain ownership of a commodity once the commodity has been sold on the cash market or forward contract

  3. How a Bull Call Spread Works A bull call spread is created by buying a call option at some strike price and simultaneously selling a call option with a higher strike price

  4. Table 1. March KCBT Call Option Premiums

  5. Table 2. Costs to Implement Strategy1 1Assumes no commission charges

  6. Table 3. Bull Call Spread Results1 1Assumes no commission charges

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