In options trading, a bear credit spread refers to any credit spread in which the value of the spread position decreases as the price of the underlying security drops. The simplest way to construct a bear credit spread is by using call options. See bear call spread.
Payoff summary
Maximum profit: The net premium received.
Maximum loss: The difference between the two strikes minus the net premium received.
Breakeven
Lower strike price plus the net premium received, when that price lies between the strikes.
Amounts are per share before fees. Multiply by the shares covered by the position; standard equity options usually cover 100 shares per contract. If a maximum profit or loss calculation gives a negative amount, use zero. These figures assume matching contracts held to expiration and do not include financing or early assignment.
Financial mechanics reviewed:
Sources: OIC strategy reference; OIC assignment guidance. Formulas use the stated payoff assumptions; examples are illustrative, not market quotes. Editorial standards and corrections.