FAB Bull Call Spread Strategy
FAB (First Trust Multi Cap Value AlphaDEX Fund), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
FAB holds a broad value-focused portfolio of stocks from the Nasdaq US Select Index Family. The fund uses a quantitative methodology to select and weight securities in three different size segments. In particular, FAB uses three value factors (P/B, ROA, and P/FCF) to rank companies. Once the fund has selected those firms best positioned for value, it employs a tiered weighting strategy that assigns weights of 50% to large caps, 30% to midcaps and 20% to small-caps. FAB makes huge sector bets and carries a small tilt. The index is reconstituted and rebalanced quarterly.
FAB (First Trust Multi Cap Value AlphaDEX Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $139.1M, a beta of 0.77 versus the broader market, a 52-week range of 83.76-107.46, average daily share volume of 9K, a public-listing history dating back to 2007, approximately 1K full-time employees. These structural characteristics shape how FAB etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.77 places FAB roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. FAB pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a bull call spread on FAB?
A bull call spread buys an at-the-money call and sells an out-of-the-money call at a higher strike for defined risk and defined reward bounded by the strike width.
FAB snapshot
As of August 14, 2026, spot at $108.09, ATM IV 15.50%, IV rank 7.09%, expected move 4.44%. The bull call spread on FAB below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 63-day expiry.
Why this bull call spread structure on FAB specifically: FAB IV at 15.50% is on the cheap side of its 1-year range, which favors premium-buying structures like a FAB bull call spread, with a market-implied 1-standard-deviation move of approximately 4.44% (roughly $4.80 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FAB expiries trade a higher absolute premium for lower per-day decay. Position sizing on FAB should anchor to the underlying notional of $108.09 per share and to the trader's directional view on FAB etf.
FAB bull call spread setup
The FAB bull call spread below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With FAB at $108.09 on that close, the first option leg uses a $108.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FAB chain at a 63-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 FAB shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $108.00 | $3.10 |
| Sell 1 | Call | $110.00 | $2.09 |
FAB bull call spread risk and reward
- Net Premium / Debit
- -$101.00
- Max Profit (per contract)
- $99.00
- Max Loss (per contract)
- -$101.00
- Breakeven(s)
- $109.01
- Risk / Reward Ratio
- 0.980
Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-call strike plus net debit.
FAB bull call spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bull call spread on FAB. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$101.00 |
| $23.91 | -77.9% | -$101.00 |
| $47.81 | -55.8% | -$101.00 |
| $71.70 | -33.7% | -$101.00 |
| $95.60 | -11.6% | -$101.00 |
| $119.50 | +10.6% | +$99.00 |
| $143.40 | +32.7% | +$99.00 |
| $167.30 | +54.8% | +$99.00 |
| $191.20 | +76.9% | +$99.00 |
| $215.09 | +99.0% | +$99.00 |
When traders use bull call spread on FAB
Bull call spreads on FAB reduce the cost of a bullish FAB etf position by selling a higher-strike call; suited to moderate-move theses where price reaches but does not vastly exceed the short strike.
FAB thesis for this bull call spread
The market-implied 1-standard-deviation range for FAB extends from approximately $103.29 on the downside to $112.89 on the upside. A FAB bull call spread caps both the risk and the reward of a bullish position; relative to an outright long call on FAB, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current FAB IV rank near 7.09% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on FAB at 15.50%. As a Financial Services name, FAB options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FAB-specific events.
FAB bull call spread positions are structurally moderately bullish; the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. FAB positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FAB alongside the broader basket even when FAB-specific fundamentals are unchanged. Long-premium structures like a bull call spread on FAB are particularly exposed to IV-crush risk through scheduled events (earnings, FDA decisions, central-bank meetings) where IV typically contracts post-event regardless of the directional outcome. Always rebuild the position from current FAB chain quotes before placing a trade.
Frequently asked questions
- What is a bull call spread on FAB?
- A bull call spread on FAB is the bull call spread strategy applied to FAB (etf). The strategy is structurally moderately bullish: A bull call spread buys an at-the-money call and sells an out-of-the-money call at a higher strike for defined risk and defined reward bounded by the strike width. With FAB etf at $108.09 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed FAB chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are FAB bull call spread max profit and max loss calculated?
- Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-call strike plus net debit. For the FAB bull call spread priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 15.50%), the computed maximum profit is $99.00 per contract and the computed maximum loss is -$101.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FAB bull call spread?
- The breakeven for the FAB bull call spread priced on this page is roughly $109.01 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The FAB market-implied 1-standard-deviation expected move in the same options snapshot is approximately 4.44%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a bull call spread on FAB?
- Bull call spreads on FAB reduce the cost of a bullish FAB etf position by selling a higher-strike call; suited to moderate-move theses where price reaches but does not vastly exceed the short strike.
- How does current FAB implied volatility affect this bull call spread?
- FAB ATM IV is at 15.50% with IV rank near 7.09%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.