Fighting Less, Fading Smarter
“The market doesn’t reward your intellect. It rewards your ability to wait, structure, and survive.”
⚔️ The Urge to Short
When the market rallies hard—especially in the face of deteriorating breadth, poor macro headlines, or inflated valuations—every contrarian trader feels it:
“This can’t last.”
“I’ve seen this movie before.”
“Time to fade the rip.”
And yet, time and time again, they short too soon. They buy naked puts. They swing for the top, albeit short-term or long-term. They fight the trend head-on—with no armor and no plan.
But here’s the truth: the market doesn’t reverse because you’re uncomfortable. It reverses when structure breaks.
Until then, you fade smart or not at all.
🧠 Enter the Bear Call Spread: The Thinking Trader’s Fade
The bear call spread isn’t about being “right.” It’s about giving the market room to be wrong, while still profiting if your broader thesis plays out.
Definition (Level 1):
Sell a call at a closer-to-the-money strike.
Buy a higher-strike call as protection.
Same expiration. Defined risk. Defined reward.
Read more about the bear call spread here.
🧱 Level 2: Structure Over Prediction
Let’s say SPY is at 565. You think it’s overbought. But you’ve been burned buying puts before.
So instead, you sell the 600/605 bear call spread.
This trade does not require a market collapse.
It only requires SPY not to rise above 535.
You’ve flipped the game from “must drop now” to “don’t blow off top in the next 30 days.”
That’s a dramatically higher probability play.
📊 Level 3: The Probabilities Edge
First of all, most traders buy puts in illiquid assets that need 5-10% downside fast just to break even. But even if you are using highly-liquid assets, you are left with no room for error when buying puts.
Bear call spreads, by contrast:
- Can win even if the market grinds higher slowly.
- Benefit from time decay (Theta).
- Lose gradually, not instantly—giving you time to adjust or roll.
Example:
If IV is elevated and you collect $1.25 credit on a 5-point wide spread, your risk-reward is ~1:3.
You only lose if price surges above your short strike plus the credit received. That’s your real breakeven.
This structure forces you to define risk in a world where most retail trades are YOLOs in disguise.
🔍 Level 4: Chart + Context + Credit
Bear call spreads are tools, not magic.
To wield them like a professional, you need alignment across 3 dimensions:
- Chart Resistance – Is there a major technical level or supply zone above your short strike? That’s your defense.
- IV Context – Is implied volatility elevated (IV rank > 50)? That’s your pricing edge.
- Credit Efficiency – Are you collecting at least 25% of the width in premium? That’s your payout edge.
When all three align, you’re no longer shorting “because it feels too high.”
You’re building a position that benefits from structural inertia.
🧘♂️ Level 5: Philosophy of Fading Trends Without Fighting Them
The bear call spread is not aggressive. It’s not glamorous.
It doesn’t satisfy the primal urge to predict the top.
But that’s precisely why it works.
Because it’s designed for the reality of markets:
- That trends persist longer than your bias.
- That price doesn’t reverse just because RSI is high.
- That timing is expensive, but probability is cheap—if you know how to structure it.
The bear call spread allows you to say:
“I’m not calling the top. But I am betting that this rally or bounce is tired.”
It’s not an ego trade. It’s a probability trade.
And in the long run, probability always beats pride.
🔚 Final Word: The Tao of Options
Bear call spreads teach the trader what most never learn:
- You don’t need to time the top.
- You don’t need the market to agree with you.
- You don’t even need to be all that bold.
You just need structure. Patience. And the willingness to let time do the work.
“The trend may be your enemy.
But time is your friend—if you know how to use it.”
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Probabilities over predictions,
— Andy Crowder
