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How to Build the Super Bear, Step by Step

NowPress play to follow along0:00 / 9:35
Chapters5 segments · tap to seek
ticker lesson

Breakdown

0:00lesson

Super bear trade setup

  • Super bear trade combines two bearish trades for a credit
  • S&P is ideal due to cash settlement
  • Sell call spread at expected move
  • Buy put spread near expected move
  • Credit spread typically results in credit
1:51lesson

Super bear trade risk and reward

  • Max loss is $470 if call strike breached
  • No downside risk due to credit collected
  • Credit spread offset put spread cost
  • Upside break even at 7760
  • Max loss is buying power
3:40lesson

Super bear trade customization

  • Adjust spread width based on confidence
  • Sell deeper in the money call spread
  • Expand downside put spread width
  • Higher delta short call spread
  • Wider downside put spread
5:32lesson

Super bear trade with expected move

  • Expected move influences spread width
  • Credit collected around expected move
  • Keep credit if S&P doesn't move beyond strikes
  • Credit spread can be manipulated
  • Expected move changes with expiration
7:40lesson

Super bear trade example

  • Sell 7800-7810 call spread for 70 cents
  • Buy 7625-7610 put spread
  • Market could fall to 7625 by end of month
  • Trade setup based on historical levels
  • Credit collected for trade

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