Bear Spreads

A bear spread is an option spread strategy used by the option trader who is expecting the price of the underlying security to fall.

Vertical Bear Spreads

The vertical bear spread is a vertical spread in which options with a lower striking price are sold and options with a higher striking price are purchased. Depending on whether calls or puts are used, the vertical bear spread can be entered with a net credit or a net debit.

Vertical Bear Credit Spread

A vertical bear spread can be established for a net credit if call options are used. The strategy is also known as the bear call spread.

Vertical Bear Debit Spread

A vertical bear spread can be established for a net debit if put options are used. The strategy is also known as the bear put spread.

Horizontal & Diagonal Bear Spreads

The bear calendar spread and the diagonal bear spread are both time spread strategies used by option traders who believe that the price of the underlying security will remain stable in the near term but will eventually fall in the long term.

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