We’ve had a few questions from newer subscribers about some of the options strategies we’ve been using in QM Trades.

If you’re not super familiar with options yet — no worries. Let’s break down one of the most approachable strategies: the bull call spread.

What Is a Bull Call Spread?

A bull call spread is a defined-risk, directional strategy you can use when you believe a stock is likely to move moderately higher, not skyrocket, just push up within a known range.

Here’s how it works:

Buy a call option at a lower strike (this gives you the right to buy the stock).

Sell a call option at a higher strike (this caps your profit but helps reduce the cost).

Both options expire on the same date, and the difference between the two strike prices is your spread width.

What Are the Risks and Rewards?

Let’s make this crystal clear:

• Max Profit = Difference between strikes − Cost of trade
• Max Loss = The upfront cost (your net debit)
• Break-even = Lower strike + Cost of trade

If the stock finishes above the upper strike, you earn the maximum profit. If it finishes below the lower strike, the entire trade expires worthless, and your loss is limited to what you paid.

Real Example: The ENTG Trade from QM Trades

Here’s how we applied this strategy in a recent trade idea shared in QM Trades.

• Stock: Entegris Inc. (ENTG)
• Reference Price: $72.72 (The price the stock was trading at when we posted the idea)
• Bullish Thesis: We expected a push to at least $76.20, with a potential move as high as $82.10 based on price structure and flow data.

So, we deployed a bull call spread:

• Buy the $72.50 Call
• Sell the $80.00 Call
• Expiration: July 18th
• Cost of trade: Approx. $3.20

What does that mean?

• Max Profit = $80.00 − $72.50 − $3.20 = $4.30 per spread
• Max Loss = $3.20 per spread
• Break-even = $72.50 + $3.20 = $75.70

As long as ENTG trades above $75.70 by expiration, the trade will move into a profit. If it closes above $80, we capture the full $4.30 reward on a $3.20 risk — a potential return of ~134%.

Risks to Keep in Mind

Even though this strategy is more conservative than buying a naked call, it’s not risk-free:

If ENTG closes below $72.50 at expiration, the spread expires worthless, and we lose the $3.20 paid.

The profit is capped at $80, regardless of how high ENTG rises.

Time decay can erode the value of the spread if the stock doesn’t move quickly enough.

That said, it’s still one of the most risk-defined and capital-efficient ways to express a bullish thesis.

Why Use a Bull Call Spread?

It’s ideal when:

• You expect moderate upside, not explosive gains.
• You want to define both your risk and reward.
• You’re looking for a cheaper alternative to buying a long call outright.

Why Use a Bull Call Spread?

The bull call spread is one of the foundational tools in our QM Trades toolkit — and for good reason. It offers a smart balance of risk control, cost-efficiency, and profit potential for directional trades like ENTG.

We’ll continue to highlight and explain strategies like this, especially when real-world examples come up in our trade flow. If you’re looking to learn by doing or want to sharpen your execution, stick with us 

Disclosure:

Past signal performance is not indicative of future performance. This article is for informational purposes and should not be construed as investment advice. All stocks and companies referenced are for illustrative purposes only.

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