Spreads2 legscreditbearish

Sell a call and buy a further-out one above it. The bull put's mirror image — a credit collected for the stock staying below a level, with the unlimited risk of a naked call removed.

You sell a call above the current price and buy a cheaper one above that. The credit is yours if the stock stays below the short strike.

The long call exists to cap the loss. A naked short call is the one common option position whose loss is genuinely unlimited — the stock can rise forever — and buying the wing turns that into a defined number.

Structurally identical to the bull put, reflected. Both collect a credit for a level holding; one bets on a floor, the other on a ceiling.

Priced off the guide's shared chain, on a $50 stock. Every figure beneath the diagram is computed from these legs by the same engine the Strategy Builder uses.

Flat and profitable below the short strike — the credit is the whole gain.

Flat and losing above the long strike, capped at the width less the credit.

The break-even sits at the short strike plus the credit.

The conditions are a level the stock has not been able to clear and implied volatility rich enough to pay for the risk. It is the natural structure when a name looks capped rather than falling.

It also appears as the upper half of an iron condor, which is simply this and a bull put sold together.

Unlike a covered call, no shares are involved — so there is no upside being given away, and no stock to be called from you. The trade-off is that there is no cushion either.

Like everything in this guide, these are descriptions of structures and conditions — context for your own decisions, not instructions to trade.