When your feeling on a stock is generally negative, bear spreads are nice low risk, low reward strategies. One of the easiest ways to create a bear spread is by using call options at or near the current market price of the stock. Like bear put spreads, bear call spreads profit when the price of the underlying stock decreases.

Bear call spreads are typically created by selling at-the-money calls and buying out-of-the-money calls. Using the Nasdaq Index Tracking Stock QQQQ , we can create a bear call spread using in-the-money options. If you like the idea behind the bear call spread, be sure to check out bull call spreads and bear put spreads. These can be comparable strategies depending on your objectives.

Bear Call Spread Explained | Online Option Trading Guide

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Multiple leg options strategies will involve multiple commissions. Member SIPC "Schwab" and optionsXpress, Inc. Deposit and lending products and services are offered by Charles Schwab Bank, Member FDIC and an Equal Housing Lender "Schwab Bank". Example Using the Nasdaq Index Tracking Stock QQQQ , we can create a bear call spread using in-the-money options.