Options Glossary

Glossary: Bear Spread

Last Updated: July 12, 2015


Bear Spread

What Does Bear Spread Mean in Options Trading?

A bear spread is a call or put options trading strategy in which different options are combined with different expiry dates to take advantage of expected downward move in the market or security. Options, generally of same expiry dates with higher strike price is bought and lower strike priced option is written in this strategy. If the trader wants to put on the trade for a credit, a lower strike call can be sold and a higher strike call can be purchased.
Here's a short video explaining vertical spreads. Bear spreads are types of vertical spreads.

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