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This results in a net debit, and the trader profits if the underlying asset's price decreases.
One effective approach to mitigate potential losses in a bearish market is through the use of a Bear Spread. This strategy involves purchasing a contract with a higher strike price and simultaneously selling a contract with a lower strike price, both with the same expiration date. This results in a net debit for the trader, who can then profit if the underlying asset's price decreases. It is a popular option for managing risk and can be a valuable tool in a trader's arsenal.