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Options · Credit spread
Bull Put Spread
A defined-risk credit spread for a market expected to remain above a chosen level.
Bullish / neutralAdvanced
Strategy mechanics
What the structure is designed to do.
A Bull Put Spread sells a put and buys a lower-strike put with the same expiration. The premium from the short put is partially offset by the long put, which caps downside risk.
The position is profitable at expiration when the underlying remains above the break-even level. Strike selection determines the balance between probability, credit received and maximum loss.
Risk check
This page is educational. Suitability depends on your objectives, experience, portfolio and ability to absorb loss.
Read the OCC options disclosurePayoff profileBull Put Spread
At expirationCapped loss below the long put; maximum profit above the short put.
The setup
- Buy a put at lower strike B
- Sell a put at higher strike A
- Use the same expiration for both legs
Decision map
Know the trade-offs before entry.
- When it fits
- A bullish or neutral outlook where the underlying is expected to remain above strike A.
- Break-even
- Strike A minus the net credit received.
- Maximum profit
- The net credit received at entry.
- Maximum loss
- The distance between strikes minus the net credit received.
- Time decay
- Generally positive, because the short option should lose value faster than the hedge.
- Primary risk
- A sustained move below the short strike, particularly near expiration.
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