Bear Call Ladder option strategy
The Bear Call Ladder is an extension to the Bear Call Spread. By buying another call at a higher strike, the position assures uncapped reward potential if the stock rises.
Payoff at expiry
Nifty, lot size 65 · Nifty future 22,916 · 19 Oct 2026Legs
| Action | Option | Strike | Lots | Qty | Premium |
|---|---|---|---|---|---|
| SELL | ITM Call | 22,850 | 1 | 65 | ₹160.73 |
| BUY | ATM Call | 22,900 | 1 | 65 | ₹133.30 |
| BUY | OTM Call | 22,950 | 1 | 65 | ₹109.04 |
How it works
- Sell 1 ITM call at the 22,850 strike for ₹160.73, collecting the premium.
- Buy 1 ATM call at the 22,900 strike for ₹133.30, paying the premium.
- Buy 1 OTM call at the 22,950 strike for ₹109.04, paying the premium.
- You pay a net ₹5,305 upfront for the position. Your maximum loss is ₹8,555.
Below 23,082 you lose, up to ₹8,555.
Above 23,082 you profit, and profit keeps growing as Nifty rises.
Set-up: Sell 1 lot ITM call, Buy 1 lot ATM Call & Buy 1 lot OTM strike Call (All equal quantity).
What happens if Nifty moves
Profit or loss at expiry| Nifty at expiry | Move | Profit / loss |
|---|---|---|
| 21,550 | −6% | −₹5,305 |
| 22,250 | −3% | −₹5,305 |
| 22,700 | −1% | −₹5,305 |
| 22,900 | Unchanged | −₹8,555 |
| 23,150 | +1% | +₹4,445 |
| 23,600 | +3% | +₹33,695 |
| 24,300 | +6% | +₹79,195 |
How the Greeks affect it
When to use
Bear Call Ladder is a Bear Call Spread with an additional buy OTM Call. Outlook is to make capital gain while reducing maximum risk.
- One can use Bear Call Ladder to repair their loss making Bear Call Spread. You can participate in upside movement of stock while still limiting down side.
Things to watch
- Time decay is generally harmful when stock is between lower and middle strike and helpful when stock is surging higher.
- Clear understanding of the direction of the trend and identification of a clear area of both support and resistance could add value to the payoff.
Bear Call Ladder: questions
What is a Bear Call Ladder strategy?
The Bear Call Ladder is an extension to the Bear Call Spread. By buying another call at a higher strike, the position assures uncapped reward potential if the stock rises.
When should you use a Bear Call Ladder?
Bear Call Ladder is a Bear Call Spread with an additional buy OTM Call. Outlook is to make capital gain while reducing maximum risk.
How do you set up a Bear Call Ladder?
Sell 1 lot ITM call, Buy 1 lot ATM Call & Buy 1 lot OTM strike Call (All equal quantity).
What is the maximum profit of a Bear Call Ladder?
Maximum Profit is unlimited beyond Higher strike Call.
What is the maximum loss of a Bear Call Ladder?
It can be Net debit/ Net credit Strategy depending upon premium received from lower strike Call as we are buying more call then selling them.
What is the breakeven of a Bear Call Ladder?
With Nifty at 22,916, the example on this page breaks even at 23,082 at expiry.