Bear Call Spread Calculator
Calculate max profit, max loss, breakeven, and return on risk for a bear call spread.
Enter the two strike prices, net premium, and number of contracts.
A bear call spread is a credit spread used when you expect a stock to stay flat or fall. You sell a lower-strike call (collecting premium) and buy a higher-strike call (paying premium for protection). The net result is a credit to your account.
Setup:
- Sell 1 call at strike K1 (lower), collect premium P1
- Buy 1 call at strike K2 (upper), pay premium P2
- Net credit received = P1 - P2 (must be positive for this to be a credit spread)
Outcomes at expiration:
- Stock finishes below K1: both calls expire worthless, you keep the full credit. Maximum profit.
- Stock finishes between K1 and K2: sold call is in the money, spread value is (stock - K1). Partial loss.
- Stock finishes above K2: spread is worth its maximum value of (K2 - K1). Maximum loss occurs.
Max profit = net credit x 100 (per contract, since each covers 100 shares) Max loss = (K2 - K1 - net credit) x 100 Breakeven = K1 + net credit Return on risk = max profit / max loss
Bear call spreads cap both profit and loss, unlike selling a naked call (which has unlimited loss potential). This defined-risk profile makes them popular for income generation when implied volatility is high – you collect more premium when the market is fearful.
The main risk: a sharp upward move before expiration forces assignment on the short call. Most traders close the spread early (buy back) if it reaches 50% of max profit rather than holding to expiration.
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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