Bear Put Spread
A defined-risk bet on a moderate fall: buy a higher put, sell a lower one.
Definition
A bear put spread is a two-leg bearish strategy. You buy a put at a higher strike and simultaneously sell a put at a lower strike in the same expiry. The premium collected from the short put offsets part of the cost of the long put, so the position is a net debit with both profit and loss capped.
Formula
Max profit = (Higher strike − Lower strike) − Net premium paid
Max loss = Net premium paid
Break-even = Higher strike − Net premium paid
Why it matters
It is a cheaper, lower-risk way to profit from a moderate down-move than buying a single put. You give up the deeper profits a naked put would earn in a crash, but in return your upfront cost drops and time decay is partly offset by the short leg. It suits a view that the underlying will drift down to around the lower strike. It is the bearish mirror of a bull call spread.
Example
With NIFTY at 22,000 you buy the 22,000 put for 150 and sell the 21,700 put for 60. Net cost is 90. Maximum profit is (22,000 − 21,700) − 90 = 210 if NIFTY closes at or below 21,700; maximum loss is the 90 paid; break-even is 21,910.
See it live
Use the TradePulse option chain to read live put premiums across strikes and build your spread.