What is a bear spread?

What is a bear spread?

If an option spread strategy is designed to be profitable when the price of the underlying security falls, it is known as a Bear Spread.
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    • What is options spread?

      An options spread is when the investor buys as well as sells options of the same underlying security but of different strike prices and/or different expiries.
    • What is a bull spread?

      If an option spread strategy is designed to be profitable when the price of the underlying security rises, it is known as a Bull Spread.
    • What is an options credit spread?

      A credit spread occurs when the investor buys options with a lower premium and sells options with a higher premium, thereby resulting in a net premium inflow.
    • What is an options debit spread?

      A debit spread occurs when the investor buys options with a higher premium and sells options with a lower premium thereby resulting in a net premium outflow.
    • What is the cost of rolling over a position?

      The investor will have to bear the difference in prices between the near month contract and the next/far month contract along with brokerage and transaction costs on both legs of the transaction.