STRATEGY

Bear Call Spread

MARKET OPINION

Bearish

MARKET POSITION

Sell a lower strike price call and buy a higher strike price call on the same commodity with the same expiration date

OPTION STRATEGY
DEBIT/CREDIT

Net credit [premium received is greater than premium paid]

PROFIT POTENTIAL

Limited to the net credit

PROFIT POINT

Any futures price below the [lower strike price plus net credit]; maximum profit point is any futures price at or below the lower strike price

LOSS POTENTIAL

Limited to the [difference between the strike prices] minus the net credit

LOSS POINT

Any futures price above the [lower strike price plus net credit]; maximum loss point is any futures price at or above the higher strike price

BREAK-EVEN-POINT

Lower strike price + net credit

MARGIN REQUIRED

Yes

DELTA

[Delta of call bought]-[Delta of call sold]