Vertical spreads

Neutral to bearish

Credit

Risk: Defined both ways

Bear call spread

Also called: Credit call spread, Call credit spread

Sell a call and buy a higher-strike call on the same expiry: keep the credit below the short strike, with the loss capped by the bought call.

Payoff sketch (per unit, index points)

At expiry

Today (7 days left)

Net premium

Credit 70 pts

Max profit

+70 pts (₹4,574 per lot)

Max loss

−130 pts (₹8,426 per lot)

Breakeven

25,170

Legs: Sell CE ATM +100 · Buy CE ATM +300. Illustration, not live prices: an index at 25,000, strikes 100 points apart, Black-Scholes premiums at 13% implied volatility, 7 days to expiry, 6.5% interest, no skew and before charges. Rupees per lot use a NIFTY lot of 65.

How it works

A short call with a ceiling on the loss: the higher call pays everything above its strike.

Index calls usually trade at lower implied volatility than puts the same distance away, so call credit spreads collect less than put credit spreads for the same distance.

When traders use it

A view that the price will stay below the short strike, with a known maximum loss.
The upper half of an iron condor.

Greeks

Delta	Negative.
Gamma	Negative near the short strike.
Theta	Positive while the price is below the short strike.
Vega	Negative, smaller than a naked call's.

Profit, loss and margin

Max profit	The net credit less charges, when the underlying settles below the short strike.
Max loss	(Strike gap − net credit) × quantity, when it settles at or above the long (higher) strike.
Breakeven	Short strike + net credit.
Margin	Roughly the maximum loss once the long call is in.

In India

SPAN margins the whole position, so a defined-risk spread usually blocks far less than its short leg alone. Brokers grant the hedge benefit only when the protective leg is actually in the account, which is why the long leg is usually placed first.
STT is charged on the premium when an option is sold (0.15% of premium from 1 April 2026 in Arthfy's cost model). A short option left to expire, in or out of the money, is not charged STT again at settlement.
Since 20 November 2024 an extra 2% extreme-loss margin applies to short index options on their expiry day, so a position carried into expiry morning can need more margin than it did the day before.
Since 20 November 2024 each exchange keeps one weekly index expiry: NIFTY on NSE and SENSEX on BSE. Since September 2025 NSE contracts expire on Tuesdays and BSE contracts on Thursdays. BANKNIFTY, FINNIFTY, MIDCPNIFTY and stock options expire monthly (NSE on the last Tuesday). A holiday moves the expiry to the previous trading day.

Arthfy numbers

Bear call spread: what it did since 2016

Bear call spread, 30 delta, wing 2 strikes beyond, entered 8-15 days before expiry.

0-2 d

3-7 d

8-15 d

16-30 d

31-45 d

Try it in the F&O hub

Opens the tool with this structure on today's NIFTY chain. Reading is free with an Arthfy account; some runs use free attempts.

Open in the builderPayoff, Greeks, scenario grid and charges on today's NIFTY chain

Backtest since 2016Daily data, every NIFTY expiry

Replay on expiry daysMinute data since October 2024

Open the option chainLive premiums, IV and Greeks

Single options

Short call (naked)

Condors & iron butterflies

Iron condor