Question

In: Finance

What is an example of a real life stock that has a bear spread right now?

What is an example of a real life stock that has a bear spread right now?

Solutions

Expert Solution

Bear spread is a option in which investor is mildly bearish on the stock in this short period of time and he will be trying to sell the call options of different strike price and buy the call options also and he can do with the put options as well so he will be trying to take a bearish position.

Currently, the stock which is in bear spread can be APPLE, as it has shown the signs of weakness in the short period of time but it has long run ahead in the long period of time so investors may be mildly bearish in the shorter period of time but the stock has high potential of growth in the long period of time so Apple have a bear spread in the short run.

One can try to buy the nearby put option of the Apple and sell the put option of higher prices and make higher money.


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