Bull e Bear Spread

Miglior broker di opzioni binarie 2020:
  • BINARIUM
    BINARIUM

    Il miglior broker di opzioni binarie!
    Allenamento gratuito!
    Ideale per i principianti!
    Ottieni il tuo bonus di iscrizione!

Bear Spread

What is a Bear Spread?

A bear spread is an options strategy implemented by an investor who is mildly bearish and wants to maximize profit while minimizing losses. The goal is to net the investor a profit when the price of the underlying security declines. The strategy involves the simultaneous purchase and sale of either puts or calls for the same underlying contract with the same expiration date but at different strike prices.

Understanding Bear Spread

The main impetus for an investor to execute a bear spread is that they expect a decline in the underlying security, but not in an appreciable way, and want to either profit from it or protect their existing position. The opposite of a bear spread is a bull spread, which is utilized by investors expecting moderate increases in the underlying security. There are two types of bear spreads that a trader can initiate – bear put spread and bear call spread. Both are classified as vertical spreads.

A bear put spread involves the buying a put, so as to profit from the expected decline in the underlying security, and selling (writing) a put with the same expiry but at a lower strike price to generate revenue to offset cost of buying the put. This strategy results in a net debit to the trader’s account.

A bear call spread involves selling (writing) a call, to generate income, and buying a call with the same expiry but at a higher strike price to limit the upside risk. This strategy results in a net credit to the trader’s account.

Bear spreads can also involve ratios, such as buying one put to sell two or more puts at a lower strike price than the first. Because it is a spread strategy that pays off when the underlying declines, it will lose if the market rises – however, the loss will be capped at the premium paid for the spread.

Key Takeaways

  • A bear spread is an options strategy implemented by an investor who is mildly bearish and wants to maximize profit while minimizing losses.
  • There are two types of bear spreads that a trader can initiate – bear put spread and bear call spread.
  • The strategy involves the simultaneous purchase and sale of either puts or calls for the same underlying contract with the same expiration date but at different strike prices.

Bear Put Spread Example

Investor is bearish on stock XYZ when it is trading at $50 per share and believes the stock price will decrease over the next month. The investor buys $48 put and sells (writes) a $44 put for net debit of $1. Best case scenario is if the stock price ends up at or below $44. Worst case scenario is if the stock price ends up at or above $48, options expire worthless, and trader is down the cost of the spread.

Break even point = 48 strike – spread cost = $48 – $1 = $47

Maximum Profit = ($48 – $44) – spread cost = $4 – $1 = $3

Maximum Loss = spread cost = $1

Bear Call Spread Example

Investor is bearish on stock XYZ when it is trading at $50 per share and believes the stock price will decrease over the next month. The investor sells (writes) $44 call and buys a $48 call for a net credit of $3. Best case scenario is if the stock price ends up at or below $44 then the options expire worthless and the trader keeps the spread credit. Worst case scenario is if the stock price ends up at or above $48 then the trader is down the spread credit minus ($44 – $48) amount.

Miglior broker di opzioni binarie 2020:
  • BINARIUM
    BINARIUM

    Il miglior broker di opzioni binarie!
    Allenamento gratuito!
    Ideale per i principianti!
    Ottieni il tuo bonus di iscrizione!

Break even point = 44 strike + spread credit = $44 + $3 = $47

Maximum Profit = Spread credit = $3

Maximum Loss = Spread credit – ($48 – $44) = $3 – $4 = $1

US Investor Sentiment, % Bull-Bear Spread:

US Investor Sentiment, % Bull-Bear Spread is at -7.89%, compared to -8.07% last week and 19.90% last year. This is lower than the long term average of 7.63%.

  • Category:Sentiment Surveys
  • Region:United States
  • Report:AAII Sentiment Survey
  • Source:The American Association of Individual Investors

Chart

Historical Data

Data for this Date Range
April 16, 2020 -7.89%
April 9, 2020 -8.07%
April 2, 2020 -15.49%
March 26, 2020 -19.17%
March 19, 2020 -16.79%
March 12, 2020 -21.57%
March 5, 2020 -0.90%
Feb. 27, 2020 -8.70%
Feb. 20, 2020 11.89%
Feb. 13, 2020 14.93%
Feb. 6, 2020 -1.34%
Jan. 30, 2020 -4.88%
Jan. 23, 2020 20.83%
Jan. 16, 2020 14.33%
Jan. 9, 2020 3.17%
Jan. 2, 2020 15.34%
Dec. 26, 2020 20.35%
Dec. 19, 2020 23.62%
Dec. 12, 2020 11.58%
Dec. 5, 2020 2.59%
Nov. 29, 2020 3.36%
Nov. 21, 2020 5.21%
Nov. 14, 2020 15.90%
Nov. 7, 2020 16.37%
Oct. 31, 2020 5.54%
Oct. 24, 2020 7.33%
Oct. 17, 2020 2.56%
Oct. 10, 2020 -23.65%
Oct. 3, 2020 -18.07%
Sept. 26, 2020 -3.89%
Sept. 19, 2020 7.52%
Sept. 12, 2020 1.88%
Sept. 5, 2020 -10.86%
Aug. 29, 2020 -16.08%
Aug. 22, 2020 -13.08%
Aug. 15, 2020 -21.67%
Aug. 8, 2020 -26.54%
Aug. 1, 2020 14.38%
July 25, 2020 -0.28%
July 18, 2020 7.29%
July 11, 2020 6.11%
July 3, 2020 0.80%
June 27, 2020 -2.47%
June 20, 2020 -2.62%
June 13, 2020 -7.36%
June 6, 2020 -20.05%
May 30, 2020 -15.29%
May 23, 2020 -11.37%
May 22, 2020 -11.37%
May 16, 2020 -9.47%

There is no data for the selected date range.

An error occurred. Please try again by refreshing your browser or contact us with details of your problem.

Stats

Last Value -7.89%
Latest Period Apr 16 2020
Last Updated Apr 16 2020, 12:03 EDT
Next Release Apr 23 2020, 12:00 EDT
Long Term Average 7.63%
Value from 1 Year Ago 19.90%
Change from 1 Year Ago N/A
Frequency Weekly
Unit Percent
Adjustment N/A
Download Source File Upgrade

Please note that this feature is only available as an add-on to YCharts subscriptions.

Please note that this feature requires full activation of your account and is not permitted during the free trial period.

Bull Spread

What Is a Bull Spread?

A bull spread is an optimistic options strategy designed to profit from a moderate rise in the price of a security or asset. A variety of vertical spread, it involves the simultaneous purchase and sale of either call options or put options with different strike prices but with the same underlying asset and expiration date. Whether a put or a call, the option with the lower strike price is bought and the one with the higher strike price is sold.

A bull call spread is also called a debit call spread because the trade generates a net debt to the account when it is opened. The option purchased costs more than the option sold.

The Basics of a Bull Spread

If the strategy uses call options, it is called a bull call spread. If it uses put options, it is called a bull put spread. The practical difference between the two lies in the timing of the cash flows. For the bull call spread, you pay upfront and seek profit later when it expires. For the bull put spread, you collect money up front and seek to hold on to as much of it as possible when it expires.

Both strategies involve collecting a premium on the sale of the options, so the initial cash investment is less than it would be by purchasing options alone.

Key Takeaways

  • A bull spread is an optimistic options strategy used when the investor expects a moderate rise in the price of the underlying asset.
  • Bull spreads come in two types: bull call spreads, which use call options, and bull put spreads, which use put options.
  • Bull spreads involve simultaneously buying and selling options with the same expiration date on the same asset, but at different strike prices.
  • Bull spreads achieve maximum profit if the underlying asset closes at or above the higher strike price.

How the Bull Call Spread Works

Since a bull call spread involves writing a call option for a higher strike price than that of the current market in long calls, the trade typically requires an initial cash outlay. The investor simultaneously sells a call option, aka a short call, with the same expiration date; in so doing, he gets a premium, which offsets the cost of the first, long call he wrote to some extent.

The maximum profit in this strategy is the difference between the strike prices of the long and short options less the net cost of the options—in other words, the debt. The maximum loss is only limited to the net premium (debit) paid for the options.

A bull call spread’s profit increases as the underlying security’s price increases up to the strike price of the short call option. Thereafter, the profit remains stagnant if the underlying security’s price increases beyond the short call’s strike price. Conversely, the position would have losses as the underlying security’s price falls, but the losses remain stagnant if the underlying security’s price falls below the long call option’s strike price.

How the Bull Put Spread Works

A bull put spread is also called a credit put spread because the trade generates a net credit to the account when it is opened. The option purchased costs less than the option sold.

Since a bull put spread involves writing a put option that has a higher strike price than that of the long call options, the trade typically generates a credit at the start. The investor pays a premium for buying the put option but also gets paid a premium for selling a put option at a higher strike price than that of the one he purchased.

The maximum profit using this strategy is equal to the difference between the amount received from the sold put and the amount paid for the purchased put – the credit between the two, in effect. The maximum loss a trader can incur when using this strategy is equal to the difference between the strike prices minus the net credit received.

Benefits and Disadvantages of Bull Spreads

Bull spreads are not suited for every market condition. They work best in markets where the underlying asset is rising moderately and not making large price jumps.

As mentioned above, the bull call limits its maximum loss to the net premium (debit) paid for the options. The bull call also caps profits up to the strike price of the option.

The bull put, on the other hand, limits profits to the difference between what the trader paid for the two puts—one sold and one bought. Losses are capped at the difference between strike prices less the total credit received at the creation of the put spread.

By simultaneously selling and buying options of the same asset and expiration but with different strike prices the trader can reduce the cost of writing the option.

Miglior broker di opzioni binarie 2020:
  • BINARIUM
    BINARIUM

    Il miglior broker di opzioni binarie!
    Allenamento gratuito!
    Ideale per i principianti!
    Ottieni il tuo bonus di iscrizione!

Like this post? Please share to your friends:
Opzioni binarie: vero o falso?
Lascia un commento

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: