fx Methods
 

OPTION BEARISH STRATEGY

Below is a list of the more frequently used strategies that are suitable for when you have a bearish outlook. There's also some brief information about each one: including the number of transactions required, whether a debit spread or a credit spread is involved, and whether it's appropriate for beginners.

You can get more detailed information on each one of these by clicking on the relevant link. If you would like additional help in choosing a strategy, then you can use our selection tool which you can find here.

Long Put

This is a single position strategy that involves only one transaction. It's suitable for beginners and comes with an upfront cost.

Short Call

Only one transaction is required for this single position strategy, and it produces an upfront credit. It isn't suitable for beginners.

Bear Put Spread

This simple strategy is perfectly suitable for beginners. It involves two transactions, which are combined to create a debit spread.

Bear Call Spread

This is relatively straightforward strategy, but it requires a high trading level so it isn't really suitable for beginners. A credit spread is created using two transactions.

Bear Ratio Spread

This is complex and not suitable for beginners. It requires two transactions and can create either a debit spread or credit spread, depending on the ratio of options bought to options written.

Short Bear Ratio Spread

This is fairly complicated and not ideal for beginners. A credit spread is created and two transactions are involved.

Bear Butterfly Spread

The bear butterfly spread has two variations: the call bear butterfly spread and the put bear butterfly spread. It's not suitable for beginners; it requires three transactions and creates a debit spread.

Bear Put Ladder Spread

This requires three transactions to create a debit spread. It's not suitable for beginners due to its complexities.