← Back to Options Strategy Guide

A two-leg options strategy that expresses a moderately bearish (or simply "not bullish") view by collecting a net credit upfront, with both maximum profit and maximum loss known before you place the trade.

Also called a short call spread or a bear call credit spread — the exact opposite side of a Bull Call Spread built on the same two strikes.

A Bear Call Spread combines selling one call at a lower strike with buying another call at a higher strike, same expiry. The premium collected from the short call is partially offset by the cost of the long call, leaving a net credit — money in your account the moment you place the trade. You keep the full credit if the underlying stays below your short strike through expiry.

This is worth noticing directly: these are the exact same two strikes used in the Bull Call Spread worked example elsewhere on this site — just with the buy and sell roles swapped. One trader's Bull Call Spread is, structurally, the other side of someone else's Bear Call Spread on the same strikes. The short call generates the income; the long call caps the risk if the underlying rises further than expected.

You collect the net credit upfront, and it's yours to keep in full as long as the underlying stays below the short strike at expiry. Splitting the price axis into three zones:

1. Below the short call strike — maximum profit, fully realized and flat. Both calls expire worthless, and you keep the entire credit.
2. Between the short and long call strikes — profit shrinks as the underlying rises, moving from max profit toward breakeven and then toward loss.
3. Above the long call strike — maximum loss, fully capped. The spread reaches its full width against you, offset only by the credit you originally collected.

A Bear Call Spread fits a view that's bearish, or simply not bullish — you don't need a big fall, just for the underlying to stay below your short strike. It's a common way to collect premium in a market you expect to grind sideways-to-down, and is often chosen over a Bear Put Spread specifically because it's a credit strategy, paid to you upfront rather than costing you to enter.

Suppose Nifty is trading at 24,000 with a weekly expiry coming up, and lot size is 65. You're moderately bearish, or at least don't expect a rally.

1. Confirm the setup. You expect Nifty to stay below roughly 24,000 through expiry.
2. Sell 1 call at the 24,000 strike for a premium of 145.
3. Buy 1 call at the 24,300 strike for 60, to cap the upside risk.
4. Calculate the net credit: 145 − 60 = 85 points, or ₹5,525 at this lot size. This is credited to your account immediately, and is also your maximum possible profit.
5. Calculate the max loss: the spread is 300 points wide, so max loss is (300 − 85) × 65 = ₹13,975.
6. Calculate the breakeven: 24,000 + 85 = 24,085.
7. Hold the position while Nifty stays below your short strike.
8. See how it resolves at expiry:
   • Nifty finishes at or below 24,000 → both calls expire worthless, you keep the full ₹5,525 credit.
   • Nifty finishes at 24,085 → you exactly break even.
   • Nifty finishes at or above 24,300 → you lose the full ₹13,975, no matter how much further it rises.

Quick reference for the same trade:

Based on the worked example above. Compare this to the Bull Call Spread page's diagram, built on the same two strikes — they're mirror images across the horizontal axis. Move the cursor over the chart to see profit/loss at any price.

• Max loss can exceed max profit — in this example, ₹13,975 versus ₹5,525, worth checking for your own strikes before assuming a high win rate makes the trade favorable overall.
• A credit received upfront isn't the same as profit yet. It can still be given back, in full or in part, if the underlying rises before expiry.
• Index options on NSE are typically European-style and cash-settled — no early-assignment risk on the short leg, unlike American-style stock options.
• Liquidity at the further strike matters, same as any defined-risk spread — check the actual bid-ask before assuming the example numbers translate directly to a live fill.