Bear Put Spread

Cheaper defined-risk bearish bet. Outlook: bearish. Direction: debit. Risk: defined.

A bear put spread (debit put spread) is the bearish mirror of the bull call spread. Buy a closer-to-money put and sell a further-OTM put. The short leg reduces cost but caps how far the position can profit on the downside.

Like its bullish counterpart, this is a cheaper directional bet — lower debit, lower breakeven improvement requirement, lower max profit. Good risk/reward when you expect a modest down-move.

Break-Even

Break-even = long-strike − net debit paid.

Max Profit

(Spread width − net debit) × 100 × contracts, achieved if spot is at or below the short strike at expiration.

Max Loss

Net debit × 100 × contracts, realized if spot is at or above the long strike at expiration.

When to Use

• You expect a moderate decline, not a crash.
• IV is elevated — selling the lower strike recovers some expensive premium.
• You want defined-risk bearish exposure without the open-ended profit of a naked long put.
• You are bearish but want a structure cheaper than an outright long put.

Common Pitfalls

• Capped profit: if the stock drops past the short strike, you stop participating in the downside.
• Put skew means this structure is often more expensive per $ of notional than a call spread for a symmetric move.
• Time decay works against the net-long position.
• Early assignment on the short put is rare but possible — more so for deep ITM with high intrinsic value.

Try This on a Live Ticker

The strategy builder applies any structure to a live ticker with real Greeks and expiration P/L: SPY · QQQ · AAPL · NVDA · TSLA.