REM Bull Call Spread Strategy
REM (iShares Mortgage Real Estate ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
The Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE NAREIT Mortgage REITs Index. The Index measures the performance of the residential and commercial mortgage real estate sector of the U.S. equity market.
REM (iShares Mortgage Real Estate ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $461.3M, a beta of 1.29 versus the broader market, a 52-week range of 18.21-24.05, average daily share volume of 562K, a public-listing history dating back to 2007. These structural characteristics shape how REM etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.29 places REM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. REM 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 REM?
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.
REM snapshot
As of September 30, 2026, spot at $18.31, ATM IV 307.00%, IV rank 63.14%, expected move 88.01%. The bull call spread on REM below is built from the September 30, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 16-day expiry.
Why this bull call spread structure on REM specifically: REM IV at 307.00% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 88.01% (roughly $16.12 on the underlying). The 16-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated REM expiries trade a higher absolute premium for lower per-day decay. Position sizing on REM should anchor to the underlying notional of $18.31 per share and to the trader's directional view on REM etf.
REM bull call spread setup
The REM bull call spread below is built from the September 30, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With REM at $18.31 on that close, the first option leg uses a $18.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed REM chain at a 16-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 REM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $18.00 | $0.93 |
| Sell 1 | Call | $19.00 | $0.13 |
REM bull call spread risk and reward
- Net Premium / Debit
- -$80.00
- Max Profit (per contract)
- $20.00
- Max Loss (per contract)
- -$80.00
- Breakeven(s)
- $18.80
- Risk / Reward Ratio
- 0.250
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.
REM bull call spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bull call spread on REM. 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 | -99.9% | -$80.00 |
| $4.06 | -77.8% | -$80.00 |
| $8.10 | -55.7% | -$80.00 |
| $12.15 | -33.6% | -$80.00 |
| $16.20 | -11.5% | -$80.00 |
| $20.25 | +10.6% | +$20.00 |
| $24.29 | +32.7% | +$20.00 |
| $28.34 | +54.8% | +$20.00 |
| $32.39 | +76.9% | +$20.00 |
| $36.44 | +99.0% | +$20.00 |
When traders use bull call spread on REM
Bull call spreads on REM reduce the cost of a bullish REM etf position by selling a higher-strike call; suited to moderate-move theses where price reaches but does not vastly exceed the short strike.
REM thesis for this bull call spread
The market-implied 1-standard-deviation range for REM extends from approximately $2.19 on the downside to $34.43 on the upside. A REM bull call spread caps both the risk and the reward of a bullish position; relative to an outright long call on REM, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current REM IV rank near 63.14% is mid-range against its 1-year distribution, so the IV signal is neutral; the bull call spread thesis on REM should anchor more to the directional view and the expected-move geometry. As a Financial Services name, REM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to REM-specific events.
REM 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. REM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move REM alongside the broader basket even when REM-specific fundamentals are unchanged. Long-premium structures like a bull call spread on REM 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 REM chain quotes before placing a trade.
Frequently asked questions
- What is a bull call spread on REM?
- A bull call spread on REM is the bull call spread strategy applied to REM (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 REM etf at $18.31 on the September 30, 2026 close, the strikes shown on this page are snapped to the nearest listed REM chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are REM 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 REM bull call spread priced from the September 30, 2026 end-of-day chain at a 30-day expiry (ATM IV 307.00%), the computed maximum profit is $20.00 per contract and the computed maximum loss is -$80.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a REM bull call spread?
- The breakeven for the REM bull call spread priced on this page is roughly $18.80 at expiration, derived from the September 30, 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 REM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 88.01%; 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 REM?
- Bull call spreads on REM reduce the cost of a bullish REM 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 REM implied volatility affect this bull call spread?
- REM ATM IV is at 307.00% with IV rank near 63.14%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.