TRENDING: This Industry Is Flashing Gargantuan Market-Size Estimates Netflix (NFLX) stock broke below its 21-day exponential and 50-day moving averages on Thursday and has been showing declining relative strength since late June. Today, let's look at a bear call spread that assumes Netflix will struggle to get back above 1,260 between now and mid-October. A bear call spread involves selling an out-of-the-money call and buying a further out-of-the-money call. Bearish trades can be risky in a bullish market, ...

A bear call spread is a type of vertical spread, meaning that two options within the same expiry month are being traded. One call option is being sold, which generates a credit for the trader. Another call option is bought to provide protection against an adverse move. More News from Barchart The sold call is always closer to the stock price than the bought call. As the name suggests, this trade does best when the stock declines after the trade is opened. However, there can be many cases where this tr ...