WTI Bear Put Spread Strategy
WTI (W&T Offshore, Inc.), in the Energy sector, (Oil & Gas Exploration & Production industry), listed on NYSE.
W&T Offshore, Inc., an independent oil and natural gas producer, engages in the acquisition, exploration, and development of oil and natural gas properties in the Gulf of Mexico. The company sells crude oil, natural gas liquids, and natural gas. As of December 31, 2021, the company had working interests in 43 fields in federal and state waters; and under lease approximately 606,000 gross acres, including approximately 419,000 gross acres on the Gulf of Mexico Shelf, as well as approximately 187,000 gross acres in the Gulf of Mexico deepwater. W&T Offshore, Inc. was founded in 1983 and is headquartered in Houston, Texas.
WTI (W&T Offshore, Inc.) trades in the Energy sector, specifically Oil & Gas Exploration & Production, with a market capitalization of approximately $654.6M, a beta of 0.29 versus the broader market, a 52-week range of 1.34-4.49, average daily share volume of 8.8M, a public-listing history dating back to 2005, approximately 400 full-time employees. These structural characteristics shape how WTI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.29 indicates WTI has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. WTI 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 WTI?
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 WTI snapshot
As of May 15, 2026, spot at $4.75, ATM IV 88.30%, IV rank 43.04%, expected move 25.31%. The bear put spread on WTI 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 WTI specifically: WTI IV at 88.30% 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 25.31% (roughly $1.20 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 WTI expiries trade a higher absolute premium for lower per-day decay. Position sizing on WTI should anchor to the underlying notional of $4.75 per share and to the trader's directional view on WTI stock.
WTI bear put spread setup
The WTI 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 WTI near $4.75, the first option leg uses a $4.75 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed WTI 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 WTI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Put | $4.75 | N/A |
| Sell 1 | Put | $4.51 | N/A |
WTI bear put spread risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
WTI bear put spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bear put spread on WTI. 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.
When traders use bear put spread on WTI
Bear put spreads on WTI reduce the cost of a bearish WTI stock position by selling a lower-strike put; suited to moderate-decline theses where price reaches but does not vastly exceed the short strike.
WTI thesis for this bear put spread
The market-implied 1-standard-deviation range for WTI extends from approximately $3.55 on the downside to $5.95 on the upside. A WTI bear put spread caps both the risk and the reward of a bearish position; relative to an outright long put on WTI, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current WTI IV rank near 43.04% is mid-range against its 1-year distribution, so the IV signal is neutral; the bear put spread thesis on WTI should anchor more to the directional view and the expected-move geometry. As a Energy name, WTI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to WTI-specific events.
WTI 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. WTI positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move WTI alongside the broader basket even when WTI-specific fundamentals are unchanged. Long-premium structures like a bear put spread on WTI 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 WTI chain quotes before placing a trade.
Frequently asked questions
- What is a bear put spread on WTI?
- A bear put spread on WTI is the bear put spread strategy applied to WTI (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 WTI stock trading near $4.75, the strikes shown on this page are snapped to the nearest listed WTI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are WTI 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 WTI bear put spread priced from the end-of-day chain at a 30-day expiry (ATM IV 88.30%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a WTI bear put spread?
- The breakeven for the WTI bear put spread priced on this page is no defined breakeven on the modeled curve 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 WTI market-implied 1-standard-deviation expected move is approximately 25.31%; 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 WTI?
- Bear put spreads on WTI reduce the cost of a bearish WTI 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 WTI implied volatility affect this bear put spread?
- WTI ATM IV is at 88.30% with IV rank near 43.04%, 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.