SMH Credit Call Spread (Bear Call) — Dec 18, 2026
Trade Setup
Current Stock Price
$135.00
Entry Price
$135.00
Target Price
$67.50
Stop Loss
$270.00
Expiration
Dec 18, 2026
Suggested Contracts
1
Strike Details
Sell 560C / Buy 570C
Risk / Reward
Max Loss
$865.00
Max Profit
$135.00
Analysis
SMH (VanEck Semiconductor ETF) presents a credit call spread (bear call) opportunity with elevated implied volatility. IV Rank 68. IV 5369.0% trades -665.0pp above 30-day HV (6034.0%). This setup favors net premium sellers.
Sell the $560 call and buy the $570 call for protection. Bearish/neutral setup — profits if SMH stays below $560 at expiration. Defined risk equal to the spread width minus credit collected. Underlying ~$557.50, 39 DTE. Max profit $135 per contract, max loss $865, 15.6% return on risk, 83% POP. Breakeven at $561.35.
Management: take profit at ~50% of max profit ($68). Cut at 2x credit ($270 loss). If short strike is breached with > 14 DTE, consider rolling out for a credit. Close before expiration week to avoid gamma risk.
Setup Instructions
Underlying: SMH @ ~$557.50 Expiration: Dec 18, 2026 (39 DTE) Net credit (entry): ~$135.00 per spread Legs:
- Sell SMH Dec 18, 2026 $560 Call (delta 0.17, mid $5.50)
- Buy SMH Dec 18, 2026 $570 Call (delta 0.13, mid $4.15)
Use limit orders at the mid or slightly worse. Verify bid-ask spread (currently ~5.5% of mid) before sending.
Management Plan
Take profit at 50% of max profit ($68). Cut loss if position reaches 2x credit received ($270 loss). Roll if tested with > 14 DTE remaining.