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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.
Moderately bearish options traders usually set a target price for the expected decline and utilize bear spreads to reduce cost. This strategy has limited profit potential, but significantly reduces risk when done correctly. The bear call spread and the bear put spread are common examples of moderately bearish strategies.
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 ...
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 ...
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
The Bear Call Credit Spread (see bear spread) is a bearish strategy and consists of selling a call option and purchasing a call option for the same stock or index at differing strike prices for the same expiration. The purchased call option is entered at a strike price higher than the strike price of the sold call option.