The bear put spread
1In one sentence
You buy a put and sell a lower put with the same expiration. The sold put pays for part of the bought one.
It's the mirror of the bull call spread: a cheaper way to bet on a fall, with profit capped at the lower strike.
2Try it: drag the dot
Example: NVDA is $215. You buy the $210 put for $6 and sell the $190 put for $2. Net cost: $4 a share ($400).
33 words to know
Long putbuy $210
The put you buy. It gains as the stock falls below $210.
Short putsell $190
The put you sell. It lowers the cost and caps profit at $190.
Net debit$400
What the spread costs. It's the most you can lose.
4Watch out
- Profit is capped. Below the lower strike the two puts cancel out, so a crash earns the same as reaching $190.
- It still needs a move. If the stock stays above $210, the whole $400 is lost.
- Time works against it. Like any bought option, the spread loses value while the stock goes nowhere.
5Quick check · 3 questions · optional
Now try it for real
See what the Co-Pilot says today about NVDA, TSLA and 8 more stocks, then drag the dot on a real price.
Common questions
What is a bear put spread?
A bear put spread is buying a put and selling another put with a lower strike and the same expiration. It profits from a moderate fall, with limited risk and limited profit.
What is the max profit on a bear put spread?
The difference between the strikes, times 100, minus what the spread cost. It's reached at or below the lower strike.
Bear put spread vs buying a put?
The spread costs less and breaks even sooner, but its profit is capped. A single put can make more in a crash, but costs more.
Education only. Examples use illustrative numbers. Not financial advice; you make your own decisions.