Explanation

This is a bear call spread strategy:

• Strategy: Selling a lower strike call (USD 50) and buying a higher strike call (USD 60) on the same underlying with the same expiration
• Net premium received: USD 10 (from selling) - USD 2 (from buying) = USD 8

Maximum Profit: USD 8 (the net premium received)

• Occurs when stock price ≤ USD 50 at expiration (both calls expire worthless)

Maximum Loss: USD 2

• Loss = (Higher strike - Lower strike) - Net premium = (60 - 50) - 8 = 10 - 8 = USD 2
• Occurs when stock price ≥ USD 60 at expiration

Why it's a bear spread: The investor profits when the stock price stays below the lower strike price, which is bearish behavior. The maximum profit is limited to the net premium received, and the maximum loss is limited to the difference between strikes minus the net premium.