Bear Call Spread
Sell lower strike Call, buy higher strike Call
Positions in Chart: Sell 1 lot of 26000 CE, Buy 1 lot of 26200 CE. Spot price: 25800
Setup
Sell lower strike OTM Call + Buy higher strike OTM Call
When to Use
- Moderate bearish outlook with income generation
Market Outlook
Volatility Expectation→Expected to Remain Stable
Price Direction↘Expected to Fall Moderately
Risk & Reward
Breakeven PointLower Strike + Net Premium Received
Max Contract LossStrike Difference - Net Premium Received
Max Position LossSame as Max Contract Loss
Strategy Details
Complexity LevelIntermediate
DirectionSteady Bearish
VolatilityNeutral
Number of Legs2 Leg
Strategy TypeCredit
Hedging CapabilityMinor Hedging
Description
A bear call spread involves selling a call at a lower strike and buying a call at a higher strike
Example
If NIFTY is at ₹25,800, you sell a ₹26,000 Call for ₹80 and buy a ₹26,200 Call for ₹50, receiving ₹30 net credit. Maximum profit is ₹30 if NIFTY stays below ₹26,000.
This information is for educational purposes only and should not be considered as financial advice. Always consult with a qualified financial advisor before making investment decisions. Data is constructed and is not actual. Calculations may have errors.
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