Bull Call Spread
Function: Medium-Risk Speculation
Outlook: Bullish

Establishing a Bull Call Spread involves buying a call at a lower strike price and selling a call with the same expiration date, but with a higher strike price that the call you bought.  Compared to most option spreads, the bull call spread is a low risk, low reward strategy because it has limited downside and limited possible profits.

As the graph below shows, establishing a bull call spread is much like going long calls.  However, the bull call spread allows some downside protection, so it's not quite as risky as going long calls.  This results in lower possible profit potential for the bull call spread.

Bull Call Spread Payoff Graph:

Naked Put Options
Function: Speculation
Outlook: Bullish

When someone writes (sells) put options against stock that they do not own, the puts are called "naked puts."  They are naked because the seller does not have underlying stock or options to cover the put if the buyer exercises it, so they are "exposed."  If someone owns puts on a stock and writes an equal or lesser number of puts against the same stock, they puts written are not considered naked because the puts he owns are server as collateral.

Since writing naked puts exposes the writer to the possibility of very high losses, most brokers usually require that the writer have a minimum cash balance in his account, usually $100,000 or more.

Naked Put Payoff Graph:

Long Calls
Function: Speculation
Outlook: Bullish

When you buy calls, you are said to be long calls.  Buying calls gives investors the opportunity to leverage their investment and make more money with what they have.  However, buying calls is relatively risky.

As the chart shows, buying calls means you lose 100% of your investment if the stock closes below the strike price, but it means you will multiple your returns if the stock goes up.

Long Call Option Payoff Graph: