Making Money In A Down Market – The Bear Call Spread

You will find a lot of places that claim you can make money in the stock markets when the markets are trending downwards. I'm going to show you one way to go about it.

It's called a "bear call spread". Basically, you find a security (in this case I used an ETF) that is trending downwards. I chose an ETF that follows the DOW industrial average called DIA.

By selling the options for the Call that expire in October, I can collect the income from the sale of those options as long as the underlying security does not go above the strike price of the options. The video below explains the process: