DocsStrategies

Bear Call Spread

Sell a lower-strike call, buy a higher-strike call. Bearish credit spread that profits if the stock holds below your short strike.

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A bear call spread is the bearish mirror of the bull put spread. Sell a call closer to the money, buy a further-OTM call as defined-risk protection. You collect a net credit, and the trade wins as long as the stock doesn’t rally meaningfully past your short strike. It’s the bearish-neutral income trade — you don’t need the stock to actually fall to win.

Outlook
Bearish to neutral. You think the stock stays below your short strike.
Legs
2 (short lower-strike call, long higher-strike call)
Max loss
Defined: spread width − net credit
Max profit
Defined: net credit collected
IV preference
Higher is better — you're a net seller of premium.
Best regime
Elevated IV with deteriorating breadth or topping action.

The structure

Two calls on the same expiration. Sell the lower-strike call, buy a higher-strike call as protection. The long leg caps the max loss at the spread width minus the credit collected.

Worked example

TSLA is at $240 and you think it stalls. The 35 DTE 260/265 bear call spread:

  • Sell 260 call at $2.40
  • Buy 265 call at $1.40
  • Net credit: $1.00 ($100 per spread)
  • Max profit: $100
  • Max loss: $5 − $1 = $4 ($400 per spread)
  • Breakeven: $260 + $1 = $261
  • POP: ~75%
  • R:R: 0.25

At expiration: TSLA below $260 → keep $100; between $260 and $261 → partial credit; above $265 → full $400 loss.

When to use it

  • Bearish or neutral view on a name. The stock can fall, sit, or even rally a bit and you still win.
  • Elevated IV.Same as all credit spreads — you’re selling premium.
  • 30-50 DTE. Standard income window.
  • Liquid underlying. Two-leg trades on illiquid names get killed by slippage.

How Tradient ranks them

Identical to bull put spreads, mirrored to calls. Walk every OTM call, group by expiration, pair short with long at the configured width, validate credit floor, sort by POP. Default sort is POP descending, then the Tradient Score reranks by composite quality.

Managing the trade

Same playbook as the bull put spread (mirrored): take profits at 50% of max profit, defend a tested short by rolling out and up, or close at a partial loss. The 50% rule applies identically — the last 50% of theta isn’t worth the risk.

Pair with bull puts on the same name
If you have a directional view that’s really “the stock will stay in this range,” you can put on a bull put spread below current price and a bear call spread above current price simultaneously. Congratulations, you’ve invented the iron condor — see Iron Condor.

Common mistakes

  • Selling on uptrending names. Bear call spreads on names breaking out are losses waiting to happen. Read the chart before selling premium against momentum.
  • Sizing too aggressively.The high POP is seductive. Don’t put on 10 contracts because the credit looks small per spread.
  • Holding through binary events.Earnings, M&A announcements, FDA decisions can blow through your short strike overnight. Use the earnings filter or skip names with imminent catalysts.

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