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Finance Dictionary and Glossary of Investment Terms
Bear spread
Definition 1.
Applies to derivative products. Strategy in the options market designed to take advantage of a fall in the price of a security or commodity, usually executed by buying a combination of calls and puts on the same security at different strike prices in order to profit as the security's price falls.
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Definition 2.
1. An option strategy that looks for maximum profit when the price of the underlying security declines. The strategy involves the simultaneous purchase and sale of options; puts or calls can be used. A higher strike price is purchased and a lower strike price is sold. The options should have the same expiration date.2. A trading strategy used by future traders who intend to profit from the decline in commodity prices while limiting the possibility of potentially damaging losses.
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Definition 3.
An option strategy designed to profit from a drop in a security's price, by selling a near-month futures contract and buying a deferred month futures contract.
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