Bear Call Spread

  • When? - The market is expected to go slightly low, but the no chance of going in an upward direction.
  • Strategy? - Buy a Call option and sell a lower strike Call option
  • Advantages? - Losses can control in both directions
  • Disadvantages? - More margin required, Bar R/R.
  • Max Profit? - Net premium
  • Max Loss? - Strike difference - net premium
  • Break-even point? - Lower Strike + Net Premium


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Bull Call Spread

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When? -  The market is expected to go slightly high, but the chance of going in a downward direction. Strategy? -  Buy a call option and sell a higher strike call option Advantages? -  Losses can control in both directions Disadvantages? -  More margin required  Max Profit?  - Strike difference - net premium Max Loss?  - Net premium Break-even point?  - Lower Strike + Net Premium
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