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Bear Call Spread · Credit

Bear Call Spread

A bear call spread is bearish-to-neutral and built for a credit. You sell a lower-strike call and buy a higher-strike call to cap the risk. You profit…

Bear Call Spread

Bets on a drop or sideways move while collecting a credit.

Payoff diagram ▲ profit▼ loss┊ breakeven

Curve at expiration · dashed line = breakeven · gold ticks = strikes

What it is

A bear call spread is bearish-to-neutral and built for a credit. You sell a lower-strike call and buy a higher-strike call to cap the risk. You profit if the underlying stays below the short strike.

How to set it up

When to use it

Use it when you think the underlying will fall or trade sideways and you want time on your side. It mirrors the bull put spread, but with calls.

Worked example

With the example values already loaded in the calculator above, this strategy returns:

Net result at entry+ $ 2.00 (credit)
Max profit$ 2.00
Max loss− $ 3.00
Breakeven52.00

The numbers above come from the same engine as the calculator — change the fields to see your own scenario.

Risks and things to watch

The max loss is the strike width minus the credit and happens if the underlying rises above K2. The breakeven is K1 + credit.

Frequently asked questions

When over buying a put?

When you want time on your side. A bear call spread profits if the underlying falls or stalls; a naked put needs a real drop.

Is the risk unlimited?

No. The long higher-strike call caps the loss.

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