Bearish strategy · Scenario Lab
Market outlook Moderately bearish
Short lower-strike call with protective higher-strike call. Use the lab to see how the position responds before committing to a single forecast.
Scenario Lab
Move the underlying, clock, and implied volatility independently. Values before expiration use a Black–Scholes estimate; expiration values use intrinsic payoff.
The catalog’s default strikes and premiums are illustrative. No ticker lookup or market data is used.
| Underlying | Today | 30 days | 14 days | 7 days | Expiration |
|---|---|---|---|---|---|
| -15% — | — | — | — | — | — |
| -10% — | — | — | — | — | — |
| -5% — | — | — | — | — | — |
| 0% — | — | — | — | — | — |
| +5% — | — | — | — | — | — |
| +10% — | — | — | — | — | — |
| +20% — | — | — | — | — | — |
At expiration
Time value has gone to zero. IV no longer changes the result.
| Underlying | Move | P/L |
|---|---|---|
| — | -15% | — |
| — | -10% | — |
| — | -5% | — |
| — | 0% | — |
| — | +5% | — |
| — | +10% | — |
| — | +20% | — |
Model boundary: theoretical estimates use dividend-adjusted Black–Scholes for European exercise or a 100-step binomial estimate for American exercise. Fees, spreads, discrete dividend dates, early assignment behavior, and liquidity effects are excluded. Calculation, not advice.
Why this structure behaves this way
Net credit position with negative delta from the short call. Collects theta daily; IV contraction is favorable. Short gamma means losses accelerate if the stock breaks above the short strike.
This page uses the catalog’s illustrative default legs so you can compare direction, time, and volatility effects in one place. Edit the assumptions above to test a different starting point.