Learn / Options / Bear call spread
Bear call spread
You sell a call and buy a higher one. You take in a credit, and a rally is capped rather than open ended.
By M.M. · Published 5 Nov 2026
What it is
A bear call spread is a credit call spread. You sell the lower strike call and buy a higher strike call with the same expiry. You are paid up front. The call you buy is what stops a rally from turning into an unlimited loss.
At expiry the credit is the most you can make, and you make it when the stock finishes at or below the sold strike. The most you can lose is the gap between the strikes, minus the credit.
When people use it
People use it when they expect the stock to stall or fall, and they want a defined loss if it rips higher instead. It is the call version of the bull put spread. Same idea, other side of the price.
A $100 stock
Take a stock at $100. Volatility is 25 percent, the risk-free rate is 4 percent, and expiry is 30 days out.
Sell the 105 call for $1.17 and buy the 110 call for $0.35.
At or below 105 both calls expire and you keep the credit. Above 110 the loss stops growing. You take in a net credit of $0.81. At expiry it breaks even at $105.81. The most you can make at expiry is $0.81. The most you can lose at expiry is $4.19.
The model uses one volatility for every strike, a flat risk-free rate, and no dividend. A live option quote will differ. Each contract here covers one share. A listed equity contract usually covers 100 shares.
Risks
A rally through the sold strike eats the credit first and then produces a loss, up to the width of the strikes. Early assignment on the short call leaves you short shares. The long call covers the upside from there, after you deal with the shares.
Credit trades feel safe because you are paid to enter. The payment is the maximum profit, not a cushion that grows with the stock. If volatility jumps, the spread can show a loss on the screen long before expiry.
Try this plan
The builder below starts on this spread at a $100 stock. Change the ticker or the legs, then copy the share link. The same tool lives at the options payoff builder.
Education only. Prices are theoretical Black-Scholes values, not live option quotes, and this is not investment advice.
Type a ticker to fill the spot from the quote, or enter the spot yourself.
| Leg | Premium | Delta | Theta / day |
|---|---|---|---|
| short 1 call $105.00 / 30d | $1.17 | 0.275 | -$0.043 |
| long 1 call $110.00 / 30d | $0.35 | 0.106 | -$0.023 |
This is a bear call spread. You are short 1 call at $105.00 and long 1 call at $110.00. They all expire in 30 days. The options bring in a net credit of $0.81. At expiry it breaks even at $105.81. The most you can make at expiry is $0.81. The most you can lose at expiry is $4.19. Model delta is -0.169. Model theta is $0.020 per day.
Payoff
At $100.00, expiry P&L $0.81, today $0.00.
| Stock | At expiry | Today |
|---|---|---|
| $80.00 | $0.81 | $0.81 |
| $86.25 | $0.81 | $0.81 |
| $92.50 | $0.81 | $0.71 |
| $98.75 | $0.81 | $0.19 |
| $105.00 | $0.81 | -$1.07 |
| $111.25 | -$4.19 | -$2.60 |
| $117.50 | -$4.19 | -$3.63 |
| $123.75 | -$4.19 | -$4.04 |
| $130.00 | -$4.19 | -$4.15 |
The model uses one volatility for every strike, a flat risk-free rate, and no dividend. A live option quote will differ. Each contract here covers one share. A listed equity contract usually covers 100 shares.