If this is all new to you, then paper trade some spreads and get the feel for it. If you trade online, the first time you execute a spread, call your broker on the phone and get him to open the trades for you. You want to make sure that you open and close both sides of the trade at the same time. We get emails asking us to compare Covered Calls to Bull Call spreads. Some folks are looking for a way to implement something similar to a covered call trade, but without having to invest a ton of money to buy some of these high priced stocks.
Call spreads can be an answer.
There are similarities in the two as well as some important differences. When entering a bull call spread, you buy a call at a given strike price, and sell a call at a higher strike price. Some of the best stocks are rather high priced stocks and many investors just don't want to dish out that much money for the stock, so they seek an alternate method of accomplishing the same thing. Sometimes a Bull Call Spread is the answer. In this example we are bullish due to the upcoming earnings announcement on April 7.