Bear Put Spread
A bear put spread buys a put and sells a lower-strike put with the same expiry — a defined-risk, defined-reward position that profits when the underlying falls moderately.
- Max profit
- 600
- Max loss
- -400
- Breakeven(s)
- 96.0
When to use
Use when you expect the underlying to decline but want to reduce the cost of a long put. The short put caps both your premium outlay and your maximum gain, making it efficient for moderate bearish moves.
Risk profile
Maximum loss is the net debit paid, occurring if the underlying finishes at or above the long put strike. Maximum profit is the strike width minus the net debit, achieved at or below the short put strike.
FAQ
How does a bear put spread differ from buying a put outright?
Selling the lower-strike put finances part of the long put premium, reducing your breakeven and net cost. The trade-off is a capped maximum gain — you give up profits below the short put strike.
What is the breakeven for a bear put spread?
Breakeven at expiration equals the long put strike minus the net debit paid. For example, buying the 100 put and selling the 90 put for a $3 net debit gives a $97 breakeven.
Does a bear put spread benefit from rising implied volatility?
As a net long options position, a bear put spread has positive vega — rising implied volatility increases the spread's value before expiration, all else equal.