An option strategy that attempts to maximize profits in bearish markets, i.e., when the prices of the underlying securities drop. This involves taking simultaneous, opposite or offsetting positions in options (both long and short). An investor following this strategy need to purchase deferred-month options and sell near-month options at the same time, so to make profit when the option underlying declines. Otherwise, losses are incurred (if the underlying price goes up).

Options with higher exercise prices should be bought, and then offset by selling options with lower exercise prices. Thanks to the put-call parity, the bear spread can be constructed using either calls or puts.