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Strategy's descriptionSelling short at the money call and buying a call option at a lower strike. The strategy outlook for this financial instrument is bullish in the short-term. According to its typical characteristics, it will usually lose value through time decay. Eventually, if the short contract’s strike price is above the financial instrument’s price at expiration it will be worthless; if it is below the instrument’s price, most definitely the counterparty will assign your short position.
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Prospect direction: The stock will be short-termed bullish, considering the duration and implied volatility disadvantages. As you already know, when a financial instrument declines normally its IV values will increase, and for this strategy, it is bad news.
Profit potential: Selling the upper strike will enforce a profit cap.
Loss potential: On the other hand, selling this upper strike will minimize your risk. We will explore the pros and cons of this strategy.Risk / reward: The floor, made by the long call option that will encounter maximum loss, divided by the cap made by the short call higher strike that will encounter maximum profit.
Breakeven point at expiration: Premium received / paid, plus lower strike equal to the financial instrument’s market price.
Time factor: All other variables staying unchanged, an option typically loses time a value premium with every passing day, and the rate of time value loses tends to accelerate as it reaches to the end of its term (the expiration date). As with most short-option strategies, the passage of time has a positive impact to the short seller. As time remaining to expiration decreases, the statistical chances for a loss in the intrinsic value shrink, too. The second positions leg is the long call, which will lose with time decay. Exploring that issue will let us, by positioning this strategy, distinguish the time factor, whether theta is positive or negative.
Implied volatility: Generally, an increase in implied volatility would negatively affect this strategy, all other variables being equal. Volatility tends to boost the value of any options, because it indicates a greater statistical probability that the stock will move enough to give the option intrinsic value by the expiration day. On the other hand, a decline in volatility has a tendency to lower an option's value, regardless of the overall stock price trend, although this strategy will be little or not influenced by the implied volatility.
Dividends: The dividend affects positively on call option contract short-seller (writers). On an ex-dividend date, the amount of the dividend will deduct from the value of the underlying stock. The second positions leg is the long call, which will lose from the dividend deduction.
It is strongly recommended that you first analyze the strategy you pick with your Toolset, and maybe test it using an option’s historical data and see if it works fine for you. Then be sure to enter with a small stake, just to get the real feel of your strategy, and gradually use your strategy on a regular portfolio management basis.
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Fundamentals 
