Bull Put Spread options strategy
A bull put spread sells a higher-strike put and buys a lower-strike put, collecting a net credit kept if the underlying stays above the short strike.
How the bull put spread is built
Sell the 210 put for 8 and buy the 200 put for 4, for a net credit of 4.
Profit and loss at expiration
The expiration payoff is calculated as: Profit = net credit − max(210 − S, 0) + max(200 − S, 0).
- Maximum profit
- The net credit received = $4 per share.
- Maximum loss
- Difference between strikes − net credit = (210 − 200) − 4 = $6 per share.
- Breakeven
- Higher strike − net credit = 206.
Worked example
At an expiration price of 215, both puts expire worthless and you keep the full $4 credit per share.
When to use it
Use it when you are neutral-to-bullish and want to collect premium with clearly defined risk.
Managing the risk
The long lower-strike put defines the maximum loss, making this a popular income strategy.
Frequently asked questions
Why choose a bull put spread over a short put?
The long put caps the downside, converting the unlimited-style risk of a naked put into defined risk.
What underlying move do I want?
You want the underlying to stay above the short strike so both puts expire worthless.
Model this strategy
Open the free OptCurve calculator to plot the bull put spread payoff, mark breakevens, and overlay it with other strategies.
Open the P&L calculator