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Options · Credit spread
Bear Call Spread
A defined-risk credit spread for a market expected to remain below a chosen level.
Bearish / neutralAdvanced
Strategy mechanics
What the structure is designed to do.
A Bear Call Spread sells a call and buys a higher-strike call with the same expiration. The long call limits the risk of a strong move higher while reducing the net credit received.
The position reaches its maximum profit when both options expire worthless. As with any credit spread, the entry premium needs to be weighed against the distance between strikes and the chance of assignment.
Risk check
This page is educational. Suitability depends on your objectives, experience, portfolio and ability to absorb loss.
Read the OCC options disclosurePayoff profileBear Call Spread
At expirationMaximum profit below the short call; capped loss above the long call.
The setup
- Sell a call at lower strike A
- Buy a call at higher strike B
- Use the same expiration for both legs
Decision map
Know the trade-offs before entry.
- When it fits
- A bearish or neutral outlook where the underlying is expected to remain below strike A.
- Break-even
- Strike A plus the net credit received.
- Maximum profit
- The net credit received at entry.
- Maximum loss
- The distance between strikes minus the net credit received.
- Time decay
- Generally positive while the underlying remains below the short strike.
- Primary risk
- A sustained move above the short strike, particularly near expiration.
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