Call Credit Spreads is a bearish strategy that involves buying a call option while at the same time selling a call option with a lower strike price. A net credit is generated by this option strategy at the time of implementation.
If the market price of the underlying security is less than both option strike prices or equal to the strike price of the lower leg, the options seller keeps the premium generated by selling the call credit spread.
If the market price of the underying security is in between both option legs, the option seller keeps the premium but
If the market price of the underlying security is greater than or equal to both option legs, then maximum loss occurs.
Generally, the lower strike price option is sold in order to generate a credit that is greater than the debit for the higher strike price option which is purchased.