Imagine an options strategy where you're cautiously hoping for a decline or stagnant market. A bear call spread is an options strategy used by options traders who are somewhat bearish (expecting a price decline) or neutral on the market. It involves selling a higher strike call option (giving someone the right to buy at a higher price) and simultaneously buying a lower strike call option (giving yourself the right to buy at a lower price) with the same expiration date on the same underlying asset. This strategy limits your risk while offering some potential profit if the price stays flat or goes down.
