A bear spread is a defined-risk, limited-reward options strategy used when a trader has a moderately bearish view on the underlying asset — expecting a moderate decline rather than a catastrophic fall. It can be constructed in two ways: a Bear Put Spread (buying a put at a higher strike and selling a put at a lower strike, with a net debit) or a Bear Call Spread (selling a call at a lower strike and buying a call at a higher strike, with a net credit). In both cases, the maximum profit is capped and the maximum loss is limited — making bear spreads more capital-efficient than outright put purchases for expressing a moderate bearish view. The Bear Put Spread profits when the underlying closes below the long put strike at expiry, with maximum profit at or below the short put strike. The Bear Call Spread profits when the underlying remains below the short call strike at expiry. In Indian F&O markets, Bear Call Spreads on Nifty 50 and Bank Nifty weekly options are particularly popular for short-term bearish positions — they collect premium upfront (net credit) and have a high probability of full profit retention when the market remains range-bound or declines moderately before the weekly expiry.
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