Bear Call Spread Strategy — Guide, Payoff & Calculator

A bear call spread is a defined-risk bearish options strategy built by selling a call and simultaneously buying a higher-strike call in the same expiration. The long call caps risk; the net credit received is the maximum profit if price stays below the short strike.

Use the interactive chart below or jump to the setup guide to select strikes and expiration with a clear risk budget.

Interactive Payoff Chart

When to Use a Bear Call Spread

• Outlook: Moderately bearish or neutral-bearish; expecting price to stay at/under resistance.
• Liquidity: Tight bid-ask spreads and healthy open interest on both legs.
• Volatility: Net vega typically negative; benefits from IV contraction.
• Catalysts: Failed breakouts, resistance rejections, post-event drift lower.

Setup: Strikes, Expiration, Sizing

Strike Selection

1. Short call: ~0.15–0.35 delta (OTM near resistance).
2. Long call: 5–10% above the short strike (defines risk).
3. Width: Choose a spread width aligned to desired max loss.
4. Check fills: Use limit orders; avoid wide markets.

Expiration

• Commonly 30–60 DTE to balance theta decay and event risk.
• Align to your catalyst window and risk tolerance.

Risk Sizing

Max profit equals the net credit. Max loss equals spread width − net credit. Size positions so that a full loss is acceptable within your portfolio risk budget.

Prefer a guided workflow? Try the Bear Call Spread Calculator to visualize outcomes and compare alternatives.

Payoff, Breakeven & Greeks

• Max Profit: Net credit (if price ≤ short strike at expiration).
• Max Loss: Spread width − net credit (plus fees).
• Breakeven: Short strike + net credit.

Greeks (at inception)

• Delta: Negative; gains if price falls or stalls.
• Theta: Typically positive; time decay works in your favor.
• Vega: Usually negative; IV drops help the position.
• Gamma: Risk rises as price approaches the short strike from below.

Management & Exits

• Profit taking: Consider closing at 25–50% of max profit or on quick drops in IV.
• Time-based: Many traders exit 7–10 days before expiration to reduce gap/assignment risk.
• Adjustments: Roll up/out if resistance holds but time is needed; otherwise reduce risk.
• Assignment: Monitor ex-div dates and ITM risk; early assignment is possible on the short call.

Worked Example (Illustrative)

Underlying at $100. Sell the $100 call and buy the $110 call in the same expiry for a $3.20 net credit.

• Max profit: $3.20 per spread (credit received).
• Max loss: $10.00 − $3.20 = $6.80 per spread.
• Breakeven: $103.20 at expiration.

Outcomes vary with price/IV/time. Use the calculator to test scenarios and exit rules before committing capital.

Frequently Asked Questions

Disclaimer

This page is for educational purposes only and is not investment advice. Options involve risk and are not suitable for all investors. Consider consulting a qualified professional. Examples are illustrative and exclude fees/slippage.

Sources & further reading: Cboe Options Education · OCC Investor Resources