| Position Composition | Risk Profile @ Expiration |
Shown here, both contracts are ITM. They could also both be OTM, or one OTM and one ITM.
 | Long 1 call at a lower strike, Short 1 call at a higher strike.
Both contracts have the same underlying and the same expiration.
The call with the strike price nearest the stock price will have the most time value. |  | Max Loss: Total cost of the spread, which is the cost of the long call minus the credit from the short call.
E.g., $2.50 - $2.00 = $0.50
Max Gain: Difference between the strike prices minus the cost of the spread.
E.g., (36 - 35) - $0.50 = $0.50 |
| Greeks-at-a-Glance | P&L caused by movement in stock price
| Upward movement generates profits; downward generates losses. | P&L corresponding to changes in implied volatility
| If short leg has more time value, falling IV is beneficial and rising IV is detrimental. If long leg has more time value, rising IV is beneficial and falling IV is detrimental. The leg whose strike is closest to the underlying asset price will have the most time value. | Time Decay
C:RR ratio is explained in "Decision Making" | Negative C:RR when long leg has more time value than short leg. Positive C:RR otherwise. | |
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