Seagull
A bull call spread paid for by selling a put below.
Bullish3 legsDebit
Illustrative: underlying at 100, strikes every 2.5, 45 days to expiry, implied volatility 25%, model prices. One lot = 100 shares.
Key figures
| Opens for | a debit of $65 |
|---|---|
| Max profit | +$435 |
| Max loss | −$9,565 if the shares went to zero |
| Break-even | 100.65 |
| Position delta today | +46 shares |
| Outlook | Bullish |
The legs
| Action | Quantity | Option | Model price |
|---|---|---|---|
| Buy | 1 | 100 call, 45 days | 3.77 |
| Sell | 1 | 105 call, 45 days | 1.79 |
| Sell | 1 | 95 put, 45 days | 1.33 |
How it works
A bull call spread paid for by selling a put below. Combinations mix calls and puts to shape the payoff, often to pay for one part of the trade with another.
When it fits
It suits a view that the underlying holds up or rises before expiry.
What can go wrong
The loss grows as the price falls, to −$9,565 in this example if the shares went to zero. Short options can be assigned early, and a sharp fall with implied volatility rising can hurt more than the expiry line suggests, which is what the crash band shows.
Building it in Trident
In the Strategy Lab, choose seagull and the days to expiry. Trident applies these strike rules to your live chain, prices each leg and draws the trade on the risk graph, where you can drag the days to expiry, change implied volatility or switch on the crash band. When it looks right, send it to order management; nothing reaches your broker until you send it.
Frequently asked questions
What is a seagull?
A bull call spread paid for by selling a put below.
What is the maximum loss on a seagull?
In this illustrative example it is −$9,565 for one lot at expiry.
Where does a seagull break even?
With the underlying at 100 in this illustrative example, the break-even at expiry is 100.65.
Can I build a seagull in Trident?
Yes. Pick it in the Strategy Lab and Trident chooses the strikes from your live chain, prices the legs and draws it on the risk graph.
Illustrative example with model prices, not a recommendation. Options carry risk of loss. See the risk disclosure.