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Published On: Mon, Apr 8th, 2013

Bear Call Spread

A type of options strategy used when a decline in price for the underlying asset is predicted.

This occurs by selling call options at a certain strike price while simultaneously buying the same number of calls at a higher strike price.  Using this strategy, an investor’s profit is equal to the difference between the price paid for the long option and the amount collected on the short option.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.

 

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