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Strategy comparison

Long straddle vs bull call spread: compare the payoff graphs

See why a straddle needs a larger move while a bull call spread caps upside. Compare original USD examples, costs, breakevens and expiry outcomes.

By Reasoned Markets · Published · 4 min read · Prepared with AI assistance. Editorial responsibility: Amir Kourosmehr.

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See the numbers

The same expiry price, two different outcomes

Hypothetical USD prices. One contract per leg, multiplier 100, same underlying and expiry, no fees. Straddle: buy the 100 call for 5 and the 100 put for 5. Spread: buy the 100 call for 7 and sell the 110 call for 3.

The same expiry price, two different outcomes
Asset price at expiryLong straddle P/LBull call spread P/L
90 USD0 USD−400 USD
100 USD−1,000 USD−400 USD
104 USD−600 USD0 USD
110 USD0 USD+600 USD
120 USD+1,000 USD+600 USD

At 110, the straddle has only recovered its 1,000 USD cost, while the spread reaches its 600 USD maximum profit. At 120, the straddle keeps gaining while the spread remains capped. The cheaper structure is not automatically the better choice.

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Same market move. Different option outcomes.

Switch the strategy and inspect the curve. Hypothetical USD prices, one contract per leg, a 100 share multiplier and no costs. This models expiration only.

Expiry payoff graph

Full-position P/L in USD, including entered costs. Above zero = profit; below zero = loss. The plotted range does not cap risk.

Long straddle

Profit and loss at expirationHorizontal axis: underlying price in USD. Vertical axis: total position profit or loss in USD. Use the slider for exact readings and the outcome table for key prices.-1.3K-4005001.4K2.3K0 · break even7085100115130Position P/L (USD)Underlying price at expiry (USD)Breakeven: 90Breakeven: 110Long straddle

Maximum loss: 1,000 USD. Maximum profit: Unlimited. Breakeven prices: 90 and 110 USD.

Buy one 100 strike call for 5 USD per share. Buy one 100 strike put for 5 USD per share. The displayed range does not limit risk.

  • Long straddle: -1,000 USD

Reference lines: Breakeven 90 · Breakeven 110

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The straddle pays for movement in either direction

A long straddle buys a call and a put with the same strike and expiry. In this example the combined premium is 10 USD per share. With a 100 multiplier, the position costs 1,000 USD and loses that amount if the asset expires exactly at 100.

The expiry breakevens are 90 and 110. The asset must move beyond either threshold for a profit before costs. Upside profit is uncapped in this model; downside profit is bounded because the underlying cannot fall below zero. A modest move may still leave a loss.

The call spread exchanges some upside for a lower debit

The bull call spread buys the lower strike call and sells the higher strike call with the same expiry. Here the debit is 7 − 3 = 4 USD per share, or 400 USD for the position. Its expiry breakeven is 104.

Above 110, gains on the long call are offset by losses on the short call. The 10 USD strike width, less the 4 USD debit, leaves a maximum expiry profit of 600 USD. This is an expiry model with both legs intact; assignment or closing one leg early changes the practical exposure.

Test the movement your idea actually requires

Use the interactive example to switch among a long call, long straddle and bull call spread. Then open the full calculator and replace the teaching premiums with your own inputs. Inspect prices near the strike, near breakeven and well beyond it.

Record the maximum loss in dollars, not just the attractive end of the curve. Compare one position at a time before changing contract size. Equal contract counts do not represent equal premium outlays or equal risk budgets.

  1. Write down the expected move and the expiry being studied.
  2. Enter the premiums and fees for each complete strategy.
  3. Compare the loss if the move does not happen with the gain if it does.
  4. Keep the result separate from the probability of the move. This graph does not estimate that probability.

Expiry outcomes are not early exit prices

A chart can be correct about expiration and still differ from the profit shown in a brokerage account today. Time value, volatility, bid and ask spreads, and the remaining life of each option affect an early exit. This tool does not model those prices.

Use the graph to understand the contract structure, then verify actual quotes and exercise rules independently. The examples compare mechanics and do not recommend either strategy.

Put the example to work.

Use your own inputs and keep the assumptions visible.

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Sources and calculation boundaries

Sources checked October 5, 2026. The examples and arithmetic are original teaching scenarios. They are not live quotes, forecasts or personal investment recommendations.

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