The bear call spread, leg by leg, with two real trades
The hedg3 Team
A bear call spread is two calls on one expiry: one sold, and one bought at a higher strike to cap the loss. It opens for a credit and keeps all of it when the stock finishes below the sold strike. The gap between the two strikes is the wing: $105 to $110 is $5 a share, $500 on 100 shares.
Bear call spread
CreditSpread AgentThe numbers at expiry
- Max profit: $100, the credit, with XYZ below $105.
- Max loss: $400 above $110: the $500 wing less the $100 credit.
- Breakeven: $106: the 105 strike plus the $1 credit.
- Collateral: $400 held at entry.
Why the max loss is $400
Two numbers set it: the credit and the wing. The 105 call brings in $160 and the 110 call costs $60, so the spread opens for a $100 credit. Above $110 the 105 call is assigned and the 110 call is exercised: 100 shares sold at $105 and bought back at $110, a $500 loss, the full wing. The $100 credit is kept.
| Sell the 105 call | +$160 |
| Buy the 110 call | −$60 |
| Net credit | +$100 |
| 105 call assigned: sell 100 XYZ at $105 | +$10,500 |
| 110 call exercised: buy 100 XYZ at $110 | −$11,000 |
| Credit kept from the open | +$100 |
| Max loss | −$400 |
Where assignment happens
Between $105 and $110 the 105 call is assigned and the 110 call expires: you are short 100 shares at $105, which needs a margin account. Above $110 both calls are exercised, the shares net out, and the loss is the $400 maximum. Closing before expiry avoids the zone.
Winner: NFLX, Sep 14 to Sep 15
| Leg | Contract | Price |
|---|---|---|
| Buy | NFLX 80 call | $2.08 |
| Sell | NFLX 79 call | $2.63 |
- Opened
- Sep 14, 2026, 11:00 AM ET · NFLX $80.18
- Net credit
- $0.55 · $55 received
- Target
- Buy back at $0.275 · +$27.50
- Stop
- $1.00
- Closed
- Sep 15, 2026, 1:06 PM ET · NFLX $77.95
- How
- Target hit
NFLX was at $80.18, above both strikes, when the spread opened for $0.55 of its $1 width. The next day NFLX was at $77.95, under the 79 sold call, and the target bought the spread back at $0.275: +$27.50 on $45 at risk.
Loser: BAC, Sep 8 to Sep 11
| Leg | Contract | Price |
|---|---|---|
| Buy | BAC 65 call | $0.195 |
| Sell | BAC 64 call | $0.425 |
- Opened
- Sep 8, 2026, 1:30 PM ET · BAC $62.695
- Net credit
- $0.23 · $23 received
- Target
- Buy back at $0.115 · +$11.50
- Stop
- $0.46
- Closed
- Sep 11, 2026, 9:47 AM ET · BAC $62.69
- How
- Price stop
BAC was at $62.695, $1.305 under the 64 sold call, when the spread opened for $0.23. Three days later BAC was at $62.69, the same price, but the cost to close had doubled to the $0.46 stop, and the stop closed it: −$23 of the $77 at risk.
Every trade, on the record
The two trades above are the Spread Agent's most recent settled winner and loser. Every bear call spread it closes, winners and losers, is on the public track record.
The full strategy page covers the Greeks and when it is used: bear call spread.
