Bear call spreads, also known as vertical spreads are to be used when you think that a stock will stay under a certain price. For instance you are looking at a chart and think that a stock that is currently trading at 20 will stay below 25 then you can do a bear call spread and make a relatively safe return.
Since stocks only trend about 20% of the time, bear call spreads are an excellent way to ensure that you can generate returns in any market. If you don't have strong conviction on the direction of a stock but you do feel like it is going nowhere fast then a bear call spread might be just the ticket.
You should be using a broker that allows you to put the entire trade on at once and not require you to pay multiple commissions. If your broker does not allow this then you should get a new broker as you will be able to save a lot of money.
The perfect bear call spread would see both options expire worthless as you want the closer option to expire worthless so that you can collect the full premium. In order for the close option to expire worthless you will need the farther long option to expire worthless as well. That is fine however as it is mainly just an insurance and margin tool then anything else.
Trade Hard and Be Happy,
Bear Call Spread
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