MODERATELY BEARISH / DEFINED EXPIRATION BAND
A bear spread buys downside exposure and sells payoff beyond a lower strike
A long bear put spread buys a higher-strike put and sells a lower-strike put. A short bear call spread sells a lower-strike call and buys a higher-strike call. With aligned contracts and strikes, both can create a falling expiration payoff capped below the lower strike. The debit or credit and lifecycle risks differ.
DEBIT PUT VERSION
Maximum profit is strike width minus net debit
Real execution uses the bought-leg ask and sold-leg bid unless filled as a quoted package.
Expiration arithmetic, not a forecast or probability.
Below the lower strike, gains on the long put are offset by losses on the short put.
Illustration: buy the $4,000 put for $52 and sell the $3,900 put for $24. Net debit is $28 per ounce, break-even is $3,972 and maximum gross profit is $72 per ounce. At or above $4,000, both lack intrinsic value.
CREDIT CALL VERSION
The credit does not eliminate the loss band
A credit is not maximum profit until obligations end. Margin can exceed the credit, and closing both legs may cost more than the displayed theoretical value.
STRESS TEST
Model a small decline, no decline and a rally
01Underlying stays above the higher strike.
02Underlying finishes exactly at break-even.
03Underlying ends between the two strikes.
04Underlying falls below the lower strike.
05One short leg is assigned before the intended exit.
06Bid-ask spread doubles during a volatile session.
The spread can be mathematically bounded at expiration while still being difficult to close or maintain. Keep account liquidity separate from payoff loss.
PRIMARY SOURCES & REVIEW BOUNDARY
Exchange education explains the structure; current contract and broker rules control execution
- CME Gold futures and options product page, Gold options contract page and Micro Gold options FAQ for the current product family and multiplier context.
- CME option strategies course with its official bull spread, bear spread, straddle, covered call and collar lessons.
- CFTC glossary for option, premium, spread, assignment, bid, ask, open-interest and volume terminology, plus CFTC Futures Market Basics and NFA investor resources for risk and intermediary due diligence.
Sources and links were reviewed August 2, 2026. Illustrations are not live quotes. Listed expirations, strikes, exercise provisions, fees, margins, position limits, liquidity and broker deadlines can change. Verify the current exchange rulebook and broker instructions before acting.
GOLD OPTIONS STRATEGY LAB
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FREQUENTLY ASKED QUESTIONS
Gold bear spread questions
What is a bear put spread in gold options?
It buys a higher-strike put and sells a lower-strike put with the same underlying futures contract, expiration and ratio. The short put lowers debit and caps downside payoff.
Can a bear spread use calls?
Yes. A bear call spread generally sells a lower-strike call and buys a higher-strike call, producing a credit structure with bounded expiration loss when matched.
What is the maximum loss on a bear put spread?
For a matched long bear put spread held to the modeled expiration, it is the net debit plus costs. Early assignment, mismatched ratios and execution can add risk.