What is Bear Spread?
Bear spread is an options strategy which is made of two Put options. In bear Spread Trader buys a put option and also sells a put option of same expiry but of lower strike. Traders use a Bear spread when they are mildly bearish on stock in near term but willing to buy for longer term. So bought put gives them option to sell stock at relatively higher price and sold call provides them a hedge. This is a “Limited Profit – Limited risk” options strategy.
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