Vertical-spread arbitrage for increasing call prices
= Vertical-spread arbitrage for increasing call prices
{title2=$K_1<K_2,\ C(K_1)<C(K_2)$}
Buying the lower-strike call and selling the higher-strike call gives a strictly negative initial cost and terminal payoff $(S-K_1)^+-(S-K_2)^+\geq0$. Hence an arbitrage-free call-price curve is decreasing in strike. The positive initial receipt may be consumed immediately or invested in cash.