# Hedging a portfolio using Bull Call Spreads

I'm having some difficulty understanding how one would hedge a portfolio using bull call spreads as outlined in the following paragraph (

Today is also a good day to revisit my suggestion for a long-term catastrophic hedge like the SQQQ 2020 \$20 (\$4)/30 (\$3.50) bull call spread at 0.50, which pays a fantastic 20:1 if the Nasdaq falls apart. As I noted on the show, it's useless as a short-term hedge as the short calls will wipe out the gains on the long calls but, if the market tanks and stays down, you can turn \$5,000 into \$100,000 so we can COMPLETELY insure a \$100,000 portfolio for \$5,000. Since our \$100,000 Options Opportunity Portfolio is already up 11% (\$11,000) for the year, putting aside \$2,500 a year for insurance is not that big a deal… (Source)

Someone gave me the following example to aid in understanding what the original author was suggesting:

Roughly calculations/estimates:

SQQQ at 17 today

Sell \$30 calls for \$ 3.5

Total cost for you is \$0.5

Assume SQQQ falls to 10

Value of \$20 calls will be 0

Close the \$30 short calls to close position at \$20.5

Net gain = 20.5 - 0.5 = \$20

The part I am having difficulty understanding is:

Close the \$30 short calls to close position at \$20.5

Net gain = 20.5 - 0.5 = \$20

To close the short call position, you will BTC \$30 calls. Why/how would you net roughly 20.5 when closing this position that you originally sold for \$3.50?