(plural bear spreads)
- (finance) One of a variety of strategies involving two or more options (options combined with a position in the underlying stock) that can potentially profit from a fall in the price of the underlying stock.
bear spread - Investment & 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.