Bear Call Spread Explained
Bear call spread explained for options traders. Learn setup, max risk, strike selection, assignment risk, and how to scan bearish credit spreads.
Frequently asked questions
What is the maximum loss on a bear call spread?
Maximum loss is the width between the strikes minus the net credit received. That is the defined-risk amount you should size the trade around before entry.
Can I still be assigned on a bear call spread?
Yes. The short call can still be assigned early, especially if it is deep in the money and has little extrinsic value left. The long call limits risk, but you still need a management plan.
Is a bear call spread better than a covered call?
It depends on the goal. A bear call spread uses less capital and has defined risk, while a covered call may fit better if you already own shares and want to collect premium against that position.