Seagull Spread Calculator
A bullish seagull is a three-leg structure: buy a call, sell a higher call to cap the upside, and sell an out-of-the-money put to pay for it. The short put often reduces the cost to near zero, giving you bullish exposure with a capped gain and a "dead zone" of little P/L between the strikes — at the price of taking assignment if the stock drops below the short put.
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Key characteristics
- Legs: long 1 call, short 1 higher call, short 1 OTM put (same expiration).
- The short put finances the call spread — often bringing the cost near zero.
- Gains are capped at the short call strike; below the short put, losses grow like long stock.
- A cheaper, capped alternative to a risk reversal for a moderately bullish view.
When to use a seagull
Use a seagull when you are moderately bullish and want cheap upside without paying full price for a call spread. Selling an out-of-the-money put covers most or all of the cost, in exchange for an obligation to buy the stock if it falls to that strike — much like a cash-secured put underneath a call spread.
It is popular in currency and commodity hedging and among equity traders who are comfortable owning the stock lower. The capped call spread keeps the upside defined, so you know your best case in advance.
Risks and management
The real risk is below the short put: there your losses track the stock lower just as if you owned shares, so a sharp decline can hurt well beyond the small premium outlay. Between the put and the long call there is a flat "dead zone" where little happens.
Only place the short put at a strike where you would genuinely accept assignment, and size it to the capital you would commit to owning the stock. Roll the put down or close it if the stock weakens toward it.
On the Greeks, the Seagull Spread is vega-negative — a fall in implied volatility (such as an earnings IV crush) works in your favour, and theta-positive, so time decay adds to the position each day it is held.
Calculate it live
Use the free OptionProfit Seagull Spread calculator to load a live option chain, build the trade, and instantly see the payoff chart, breakevens, probability of profit, Greeks and a Monte Carlo simulation of outcomes.
- A long call spread paid for by a short OTM put — often near zero cost.
- Upside is capped at the short call strike.
- Downside below the short put behaves like owning the stock.
- Only sell the put where you would happily be assigned.
AAPL, AMZN, META, GOOGL, AVGO, PLTR, WFC, GS, V, MA, GM, WMT, SBUX, BABA
Frequently asked questions
Why is it called a seagull?
The payoff diagram — a flat middle with wings that rise and fall on either side — resembles a seagull in flight.
How is a seagull different from a risk reversal?
A risk reversal is just a short put plus a long call (uncapped upside). A seagull adds a short call to cap the upside, which cheapens the trade further.
What is my worst case?
A large drop below the short put, where losses grow like a long stock position. Size the put to the shares you are willing to own.
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