Options Strategy
Bear Call Spread - Nifty 50
Sell a lower strike call and buy a higher strike call in the same expiry. You collect a net credit upfront. The full credit is yours to keep if Nifty stays below the sold call at expiry. Risk is defined and capped by the bought call above.
Leg 1 — SELL Call (lower strike)
24,000 CE
Receive premium: ₹320
Leg 2 — BUY Call (higher strike)
24,500 CE
Pay premium: ₹155
Net credit
₹12,375
Max profit (per lot)
Breakeven
24,165
Sold strike + net credit
Max loss
₹25,125
Spread width − net credit
Reward / Risk
0.5 : 1
Net credit ÷ max loss
Adjust your trade parameters
Below sold strike
Both calls expire worthless. Keep the full net credit collected.
At breakeven
Sold strike + net credit. The rally just erases your collected credit.
Between strikes
Partial loss as the sold call gains value against you.
Above bought strike
Max loss reached. Bought call caps any further upside damage.
Bear Call Spread vs Bear Put Spread: Both are bearish strategies with defined risk. The Bear Call Spread is a credit spread — you collect money upfront and profit from time decay if Nifty stays flat or falls. The Bear Put Spread is a debit spread .You pay upfront and need Nifty to fall to profit. Use the Bear Call Spread when you expect Nifty to stay flat or drift lower, and want to collect income rather than pay for directional exposure.
How to execute on NSE
1
Identify a resistance level on Nifty above which you do not expect the market to rally. This becomes your sold strike region.
2
SELL the lower strike Call (e.g. 24,000 CE). This is your income leg. You receive premium upfront.
3
BUY the higher strike Call (e.g. 24,500 CE) as protection. Net credit = Sell premium − Buy premium.
4
Place both legs as a spread order to avoid leg risk. Net credit hits your account immediately on execution.
5
Exit when 50–70% of the net credit has decayed. If Nifty breaks above the sold strike, exit the spread immediately to limit losses.
Key risks to know
Sold strike breach: If Nifty rallies above the lower sold strike, the spread starts losing. The breakeven is not at the sold strike ,it is above it by the net credit amount. Monitor the position closely.
Reward to risk is typically below 1: Credit spreads usually collect less than the potential max loss. The trade wins frequently in flat or bearish markets, but a single large loss can erase multiple winning trades.
Theta works for you: As the seller, every passing day benefits this position if Nifty stays below the sold strike. Time decay accelerates in your favour in the final week before expiry.
IV spike risk: A sudden jump in implied volatility raises the value of the sold call, turning a profitable position into a loss even without a large Nifty move. Avoid this trade ahead of major scheduled events.