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A bear call spread is a limited profit, limited risk options trading strategy that can be used when the options trader is moderately bearish on the underlying security. It is entered by buying call options of a certain strike price and selling the same number of call options of lower strike price (in the money) on the same underlying security with the same expiration month.
Many options strategies are built around spreads and combinations of spreads. For example, a bull put spread is basically a bull spread that is also a credit spread while the iron butterfly can be broken down into a combination of a bull put spread and a bear call spread.
A long put ladder is also called a bear put ladder. [8] A short put ladder is also called a bull put ladder. [9] A ladder can be seen as a modification of a bull spread or a bear spread with an additional option: for instance, a bear call ladder is equivalent to a bear call spread with an additional long call. A bull put ladder is equivalent to ...
Buying a call option. Buying a put option. Type of bet. Bullish. Bearish. Breakeven price. Strike price plus premium. Strike price minus premium. Right. Right to buy at strike price
Defined-risk spreads balance risks and rewards. Speculation strategies such as naked call options carry unlimited risk. Strategies also reflect bullish, bearish or neutral views on asset price ...
A covered call can be an attractive options strategy for a variety of reasons, but like all options strategies, it has its downsides, too. Advantages of a covered call. Generates income from a ...