help me with Bear Strategy?? with an example

[tarun_iift]

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.

 

[markdirtbags]

1) Buying the higher put and selling the lower call.

2) selling calls, then buying higher calls.



Edited 1 time(s). Last edit at Monday, August 6, 2007 at 03:41PM by mark@dirtbags.

 

[maratikus]

For example, sell a 30 delta call, buy a 10 delta call. In this situation your profits are limited and your losses are limited. Or you can buy a put.