The Bear Call Income Engine

To build the “Income Engine,” we use two different call options on the same stock with the same expiration.

SPY Current Price: $672.35

  1. The Short Leg (Income): You Sell the $700 Call. You receive $3.67 ($367.00).

  2. The Long Leg (Protection): You Buy the $704 Call. You pay $2.84 ($284.00).

  3. The Result: $3.67 – $2.84 = $0.83 ($83.00 Net Credit).

The broker puts $83 into your account immediately. This is yours to keep if SPY stays below $700.