BKR Bear Put Spread Strategy
BKR (Baker Hughes Company), in the Energy sector, (Oil & Gas Equipment & Services industry), listed on NASDAQ.
Baker Hughes Company provides a portfolio of technologies and services to energy and industrial value chain worldwide. It operates through four segments: Oilfield Services (OFS), Oilfield Equipment (OFE), Turbomachinery & Process Solutions (TPS), and Digital Solutions (DS). The OFS segment offers exploration, drilling, wireline, evaluation, completion, production, and intervention services; and drilling and completions fluids, wireline services, downhole completion tools and systems, wellbore intervention tools and services, pressure pumping systems, oilfield and industrial chemicals, and artificial lift technologies for oil and natural gas, and oilfield service companies. The OFE segment provides subsea and surface wellheads, pressure control and production systems and services, flexible pipe systems for offshore and onshore applications, and life-of-field solutions, including well intervention and decommissioning solutions; and services related to onshore and offshore drilling and production operations. The TPS segment provides equipment and related services for mechanical-drive, compression, and power-generation applications across the oil and gas industry. Its product portfolio includes drivers, compressors, and turnkey solutions; and pumps, valves, and compressed natural gas and small-scale liquefied natural gas solutions.
BKR (Baker Hughes Company) trades in the Energy sector, specifically Oil & Gas Equipment & Services, with a market capitalization of approximately $64.89B, a trailing P/E of 20.78, a beta of 0.97 versus the broader market, a 52-week range of 35.83-70.41, average daily share volume of 9.2M, a public-listing history dating back to 1987, approximately 57K full-time employees. These structural characteristics shape how BKR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.97 places BKR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. BKR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a bear put spread on BKR?
A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width.
Current BKR snapshot
As of May 15, 2026, spot at $64.16, ATM IV 35.70%, IV rank 56.42%, expected move 10.23%. The bear put spread on BKR below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 34-day expiry.
Why this bear put spread structure on BKR specifically: BKR IV at 35.70% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 10.23% (roughly $6.57 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated BKR expiries trade a higher absolute premium for lower per-day decay. Position sizing on BKR should anchor to the underlying notional of $64.16 per share and to the trader's directional view on BKR stock.
BKR bear put spread setup
The BKR bear put spread below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With BKR near $64.16, the first option leg uses a $65.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BKR chain at a 34-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 BKR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $65.00 | $3.10 |
| Sell 1 | Put | $60.00 | $1.15 |
BKR bear put spread risk and reward
- Net Premium / Debit
- -$195.00
- Max Profit (per contract)
- $305.00
- Max Loss (per contract)
- -$195.00
- Breakeven(s)
- $63.05
- Risk / Reward Ratio
- 1.564
Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit.
BKR bear put spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bear put spread on BKR. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | +$305.00 |
| $14.20 | -77.9% | +$305.00 |
| $28.38 | -55.8% | +$305.00 |
| $42.57 | -33.7% | +$305.00 |
| $56.75 | -11.5% | +$305.00 |
| $70.94 | +10.6% | -$195.00 |
| $85.12 | +32.7% | -$195.00 |
| $99.31 | +54.8% | -$195.00 |
| $113.49 | +76.9% | -$195.00 |
| $127.68 | +99.0% | -$195.00 |
When traders use bear put spread on BKR
Bear put spreads on BKR reduce the cost of a bearish BKR stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
BKR thesis for this bear put spread
The market-implied 1-standard-deviation range for BKR extends from approximately $57.59 on the downside to $70.73 on the upside. A BKR bear put spread caps both the risk and the reward of a bearish position; relative to an outright long put on BKR, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current BKR IV rank near 56.42% is mid-range against its 1-year distribution, so the IV signal is neutral; the bear put spread thesis on BKR should anchor more to the directional view and the expected-move geometry. As a Energy name, BKR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BKR-specific events.
BKR bear put spread positions are structurally moderately bearish; the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. BKR positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move BKR alongside the broader basket even when BKR-specific fundamentals are unchanged. Long-premium structures like a bear put spread on BKR are particularly exposed to IV-crush risk through scheduled events (earnings, FDA decisions, central-bank meetings) where IV typically contracts post-event regardless of the directional outcome. Always rebuild the position from current BKR chain quotes before placing a trade.
Frequently asked questions
- What is a bear put spread on BKR?
- A bear put spread on BKR is the bear put spread strategy applied to BKR (stock). The strategy is structurally moderately bearish: A bear put spread buys an at-the-money put and sells an out-of-the-money put at a lower strike for defined risk and defined reward bounded by the strike width. With BKR stock trading near $64.16, the strikes shown on this page are snapped to the nearest listed BKR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are BKR bear put spread max profit and max loss calculated?
- Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-put strike minus net debit. For the BKR bear put spread priced from the end-of-day chain at a 30-day expiry (ATM IV 35.70%), the computed maximum profit is $305.00 per contract and the computed maximum loss is -$195.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a BKR bear put spread?
- The breakeven for the BKR bear put spread priced on this page is roughly $63.05 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current BKR market-implied 1-standard-deviation expected move is approximately 10.23%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a bear put spread on BKR?
- Bear put spreads on BKR reduce the cost of a bearish BKR stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
- How does current BKR implied volatility affect this bear put spread?
- BKR ATM IV is at 35.70% with IV rank near 56.42%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.