Bear call spread

Also called Call credit spread, short call spread

Selling a call and buying a higher-strike call on the same expiration for a credit; profits if price stays below the short strike.

A bear call spread sells a call and buys a higher-strike call on the same expiration. You collect a credit; the long call caps the loss.

• Max profit: the credit, if price is below the short strike at expiration.
• Max loss: the width less the credit, if price is above the long strike.
• Breakeven: the short strike plus the credit.

Example: QQQ at $520, sell the $530 call and buy the $535 call for $0.90. Keep $90 per spread if QQQ finishes below $530; lose up to $410 above $535; break even at $530.90.

It's bearish-to-neutral: it wins if price falls, stays flat, or rises a little. Unlike a lone short call, the loss has a ceiling.

In Theta Vantage

The strategy calculator builds a bear call spread from its library, with the short call at the edge of the expected move or the delta you pick, and shows its credit, max loss, breakeven, and chance of profit. Check the short strike against the call wall and the high edge of the expected move.