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bear spread Finance Definition

The simultaneous purchase of a call option with a higher exercise price and the sale of an option with a lower exercise price. A bear spread also can be created by the simultaneous purchase of a put option with a higher exercise price and the sale of a put option with a lower exercise price. A trader who sets up a bear spread expects prices to go lower but still wants a way to limit the amount of money spent purchasing options. A bear spread is the opposite of a bull spread.