Chapter 06 · Section 6.1

Calls in a Bearish Strategy

  1. 1Short a call
  2. 2A bear market
  3. 3Profit Potential
  4. 4Loss Potential
  5. 5Breakeven Point
  6. 6Increase in volatility

Another strategy to use with a bearish market outlook would be to write calls. In this case the option writer would profit by keeping the premium after the call expires.