Sell a lower call + buy a higher call: you collect a net premium. Profits if the price holds or falls.
The structure
A Bear Call Spread (Bear Call Spread) collects premium on a bearish view or a ceiling you expect to hold. You sell a call near the price and buy a higher one as protection. You keep the net credit as long as the stock stays below the sold strike until expiration.
When to use it
When your view is “it won't get past this level”: stubborn resistance, a large Call Wall above the price, or a downtrend whose failed bounces you want to use. It is a bet on a ceiling, not on a crash.
Maximum profit and loss
Maximum profit is the net credit collected, kept if both legs expire worthless. Maximum loss is the gap between the two strikes minus the credit, if the stock breaks above the higher strike. Breakeven is the short strike plus the credit.
Hypothetical example
Index at 4,950 and Call Wall at 5,000: sell a call at strike 5,000 and buy another at strike 5,050, for a net credit of $12. If the ceiling holds, the whole credit is profit. If price breaks through hard, the loss is capped at $38 however high it flies.
Common mistake
Selling it under a fragile ceiling in a stubborn uptrend. The rally runs over ceilings one after another, and a string of small gains is wiped out by one breach. Ceiling quality (structural, not cosmetic) is half the trade.
Where to put the barrier
Above structural resistance that is likely to hold, such as a dense Call Wall, and not at the nearest tempting premium. Measure the distance by probability (the delta of the sold leg), not by feel. Closing after you keep most of the credit is wiser than waiting for final settlement.
Where to see it on the platform
The calculator builds it in the strategies tab, and the gamma dashboard points to the real structural ceilings where open call contracts pile up.
The Gamma dashboard points to the walls, and the calculator works out the credit and the maximum loss before you commit.
