Strategy lesson · Spreads · bearish
Bear Call Credit Spread Explained
Credit vertical: sell a lower-strike call and buy a higher-strike call. Bearish/neutral defined-risk short premium.
How a Bear Call Credit Spread is built
Sell call at K1, buy call at K2 (K2 > K1).
- Leg 1: sell call · strike template 100 · premium ~3.5 · 1 contract(s)
- Leg 2: buy call · strike template 110 · premium ~1.2 · 1 contract(s)
Risk & reward snapshot
| Market bias | bearish |
|---|---|
| Max profit | Net credit. |
| Max loss | Width − credit. |
| Breakeven | Short call strike + credit. |
Figures are conceptual for the classic structure. Your actual premiums, strikes, and fees change the numbers — confirm on the calculator.
When traders use it
- You expect the stock to stay below the short call.
- Prefer defined risk over naked short calls.
Key risks
- Squeeze or strong rally can tag max loss.
- Short call assignment risk when deep ITM.
Practical tips
- Compare iron condors if you also want a put credit side for range-bound views.
Practice on the calculator
- Open the Bear Call Credit Spread calculator.
- Load a symbol and option chain; fill realistic mid premiums.
- Review max profit, max loss, breakevens, and the date × price heatmap.
- Change strikes and DTE to see how risk shape shifts.
FAQ
What is a Bear Call Credit Spread?
Credit vertical: sell a lower-strike call and buy a higher-strike call. Bearish/neutral defined-risk short premium.
What is the max loss on a Bear Call Credit Spread?
Width − credit.
When should I use a Bear Call Credit Spread?
You expect the stock to stay below the short call. Prefer defined risk over naked short calls.