Bear Spread
1. An option strategy seeking maximum profit when the price of the underlying security declines. The strategy involves the simultaneous purchase and sale of options; puts or calls can be used. A higher strike price is purchased and a lower strike price is sold. The options should have the same expiration date.
2. A trading strategy used by futures traders who intend to profit from the decline in commodity prices while limiting potentially damaging losses. Investopedia Says:
1. You make money if the underlying goes down and lose if the underlying rises in price.
2. A bear spread is created through the simultaneous purchase and sale of two of the same or closely related futures contracts. This is accomplished in the agricultural commodity markets by selling a future and offsetting it by purchasing a similar contract with an extended delivery date. Related Terms:
Bear
Bull Spread
Bull Vertical Spread
Butterfly Spread
Current Delivery
Debit Spread
Delivery
Futures Contract
Spread
Vertical Spread |