Two strategies for bear market spread options
- Buy a higher priced call option and sell a call option with the same expiration date at a lower exercise price.
- The maximum profit can be achieved when the stock price is lower than the exercise price of the low-priced option, and you can get the premium of the bear market spread.
- Buy a lower priced put option and sell a put option on the same expiration date at a higher exercise price.
- The maximum profit can be obtained when the stock price falls below the exercise price of the lower priced option.
- The maximum profit is the strike price difference between two options multiplied by 100 minus the premium paid to purchase this strategy.