Bullish trading strategies are designed to profit from rising markets. Traders use these strategies when they expect an asset’s price to increase.
Key Bullish Trading Strategies
- Buying Call Options – A straightforward way to bet on price increases with limited risk.
- Bull Call Spread – also known as a Long Call Vertical Spread and Debit Call Spread. This strategy has one buying a lower strike call and selling a higher strike call, with a net debit paid upfront to reduce costs.
- Bull Put Spread – also known as a Put Credit Spread and Short Put Spread. Selling a higher strike put and buying a lower strike put to collect a net credit.
- Cash-Secured Put – Selling a put option with enough cash set aside to buy the stock if assigned.
- Covered Call – Holding a stock and selling a call option to generate income while maintaining upside potential.
These strategies help traders maximize gains while managing risk in bullish market conditions.
The stock market tends to be bullish more often than bearish over long periods. Historically, bull markets, defined as periods when major stock indexes rise 20% or more, have lasted a median of 42 months (3.5 years), with a median price gain of 87%. In contrast, bear markets have lasted a median of 19 months (less than 2 years), with a median drop of -33%.
