Bearish Options Strategies
Learning how to make money in down markets is a critical component to your long-term success rate. The ability to profit when stocks are falling gives options traders a superior edge in the financial markets.
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Short Call

A short call is a single-leg, bearish options strategy with undefined risk and limited profit potential. A short call is sold when the seller believes the price of the underlying asset will be below the strike price on or before the expiration date.
Short Call
Kirk Du Plessis
Apr 19, 2021

A short call is an undefined risk trade where you are selling options above the current market price of the stock anticipating a drop in IV and/or the stock to remain below your strike price. This is one of the key building blocks for income and premium selling strategies because you collect a credit when the trade is entered and typically have a very high probability of success. Short calls are typically frowned upon in the industry because of their "unlimited loss" feature. While we absolutely respect this, we also know that with probabilities and statistics we can calculate the likelihood of that happening very easily, thus making this trade is not as "bad" as you might think.

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Bear Put Backspread
A bear put backspread is a multi-leg, risk-defined, bearish strategy, with unlimited profit potential. A bear put backspread is purchased when an investor believes the underlying asset’s price will be below the long put strike prices at expiration.

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