# Bear Call Spread > A bear call spread sells a call and buys a higher strike call for a credit. Learn the payoff, how it caps short call risk, strike choices and trade management. Source: https://learn.tradelabsai.com/options/bear-call-spread/ Track: Options · Level: Advanced · Updated: 2026-10-03 Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice. Cite as: TradeLabs Learn, "Bear Call Spread", https://learn.tradelabsai.com/options/bear-call-spread/ A bear call spread, also called a short call spread or call credit spread, sells a call at one strike and buys a call at a higher strike with the same expiration. You receive a net credit. If the underlying stays below the short strike through expiration, both calls expire and you keep the credit. The long call caps the loss if the price rallies, turning a short call's open ended risk into a known maximum. It suits neutral to bearish views, especially below resistance. ## Construction 1. **Sell a call** at a lower strike, usually out of the money. 2. **Buy a call** at a higher strike for protection. 3. **Same underlying and expiration.** 4. **Receive a net credit.** ## Payoff at a glance | Feature | Bear call spread | |---|---| | Outlook | Neutral to bearish | | Maximum gain | Net credit | | Maximum loss | Strike width minus net credit | | Break even at expiry | Short strike + net credit | | Time decay | Helps (when out of the money) | | Rising implied volatility | Hurts | ## Worked example **Example: Selling calls above resistance** A stock trades at $95 and has failed three times near $100. You sell the $100 call for $1.60 and buy the $105 call for $0.50. Net credit: $1.10 ($110 per spread). | Stock at expiry | Result per spread | |---|---| | $100 or below | +$110 | | $101.10 | $0 (break even) | | $103 | minus $190 | | $105 or above | minus $390 (maximum: $5 width minus $1.10) | Compared with a naked short $100 call, which collects $160 but has no cap on losses, the spread gives up $50 of premium to cap the worst case at $390. See [Short Call](https://learn.tradelabsai.com/options/short-call/). ## Why choose a bear call spread - **Defined risk** instead of a naked call's open ended risk. - **Lower margin** than naked calls. - **Profits in flat and falling markets,** and even in slightly rising ones if price stays below the short strike. - **Benefits from time decay** while out of the money. See [Theta](https://learn.tradelabsai.com/options/theta/). ## Choosing strikes - **Short strike above resistance,** or at around 0.15 to 0.30 delta. See [Support and Resistance](https://learn.tradelabsai.com/price-action/support-and-resistance/) and [Delta](https://learn.tradelabsai.com/options/delta/). - **Width:** wider spreads collect more but risk more. - **Call skew:** on equity indices, out of the money calls usually carry lower implied volatility than puts, so call credit spreads collect less premium than put spreads at similar distances. See [Volatility Smile and Skew](https://learn.tradelabsai.com/volatility/volatility-smile-and-skew/). ## Risks specific to call spreads - **Short squeezes and takeover news** can send stocks through both strikes overnight. - **Strong bull markets** can steadily grind through short call strikes. - **Early assignment before dividends:** a short in the money call can be assigned the day before the ex dividend date, leaving you short shares and owing the dividend. See [Early Exercise](https://learn.tradelabsai.com/options/early-exercise/). ## Managing the trade - **Take profits** at 50% to 75% of the credit. - **Exit or roll** if price breaks above resistance and the short strike is threatened. - **Close before expiry** if price is between the strikes. - **Watch dividend dates** if the short call is in the money. ## Combining with a put spread Selling a bear call spread above the market and a bull put spread below it creates an iron condor, which profits if price stays in a range. See [Iron Condor](https://learn.tradelabsai.com/options/iron-condor/). ## Common mistakes - **Selling call spreads on momentum stocks** in strong uptrends. - **Collecting tiny credits** for large risk. - **Ignoring dividends and early assignment.** - **No exit plan** when the short strike is breached. ## Frequently asked questions ### What is a bear call spread? Selling a call and buying a higher strike call with the same expiry for a net credit, profiting if the underlying stays below the short strike. ### What is the maximum loss on a bear call spread? The difference between the strikes minus the credit received, multiplied by the contract size. ### What is the difference between a bear call spread and a bear put spread? A bear call spread is opened for a credit and profits if price stays below the short strike; a bear put spread is opened for a debit and profits if price falls. Next, learn spreads across expiries in [Calendar Spreads](https://learn.tradelabsai.com/options/calendar-spreads/). ## Continue learning - Next lesson: [Calendar Spreads](https://learn.tradelabsai.com/options/calendar-spreads/) - Previous lesson: [Bull Put Spread](https://learn.tradelabsai.com/options/bull-put-spread/) - Related: [Bull Put Spread](https://learn.tradelabsai.com/options/bull-put-spread/): A bull put spread sells a put and buys a lower strike put for a net credit. Learn the payoff, probability, strike and width choices, and how to manage losers. - Related: [Short Call](https://learn.tradelabsai.com/options/short-call/): A short call sells a call option to collect premium, profiting if the price stays below the strike. Learn the payoff, uncapped risk, margin and safer alternatives. - Related: [Bear Put Spread](https://learn.tradelabsai.com/options/bear-put-spread/): A bear put spread buys a put and sells a lower strike put to cut cost and cap profit. Learn the payoff, break even, strike choice and use as a hedge. - Related: [Iron Condor](https://learn.tradelabsai.com/options/iron-condor/): An iron condor sells a put spread and a call spread to profit if price stays in a range. Learn the payoff, strike and width choices, adjustments and the main risks. - Related: [Vertical Spreads](https://learn.tradelabsai.com/options/vertical-spreads/): A vertical spread buys and sells options of the same type and expiry at different strikes. Learn debit vs credit spreads, the four types and how to choose widths. - Related: [Theta Harvesting](https://learn.tradelabsai.com/options/theta-harvesting/): Theta harvesting sells options to collect time decay and the volatility risk premium. Learn the evidence, the common structures and how to survive the tail risk.