What does a trader do in a bull spread with calls?

In a bull spread using call options, a trader aims to profit from expected increases in the price of the underlying asset. To achieve this, the trader buys a low strike call option and sells a high strike call option.

By purchasing the low strike call, the trader secures the right to buy the underlying asset at a lower price, allowing them to gain from any price increases in the underlying asset up to that strike price. Selling the higher strike call helps to finance the purchase of the low strike call; it obligates the trader to sell the underlying asset at that higher strike price if the option is exercised.

This combination allows the trader to have a limited risk and a limited potential profit, which is characteristic of a bull spread strategy. The profit occurs when the underlying asset's price rises and stays between the two strike prices, maximizing the gain when prices approach the higher strike call but not exceeding it. Hence, the answer reflects the correct strategy commonly employed in a bull spread using call options.