Bearish · Defined risk
Bear Put
Spread
The mirror image of the bull call spread — a moderately bearish trade with capped, defined risk and reward. Here's how to build it and the exact numbers.
What it is
A bear put spread (a put debit spread) means buying a higher-strike put and selling a lower-strike put of the same expiry. The sold put offsets part of the cost, so it's cheaper than buying a put outright — at the cost of capping your downside profit.
Key facts
- Market view: moderately bearish.
- Construction: Buy 1 higher-strike put + Sell 1 lower-strike put (same expiry).
- Net cost: debit.
- Max profit: (higher strike − lower strike) − net premium paid.
- Max loss: the net premium paid.
- Breakeven: higher strike − net premium paid.
Worked NIFTY example
NIFTY at 22,500. Buy the 22,500 put for 150 and sell the 22,300 put for 70 → net cost 80 (illustrative):
- Breakeven: 22,500 − 80 = 22,420.
- Max profit: (22,500 − 22,300) − 80 = 200 − 80 = 120, at/below 22,300.
- Max loss: 80, if NIFTY expires at/above 22,500.
When to use it
- You expect a measured decline, not a crash.
- You want cheaper, defined-risk bearish exposure vs a naked long put.
- IV is elevated — selling the lower strike offsets some volatility cost.
Risks to respect
- Profit is capped at the lower strike — a market crash won't pay more.
- It's a debit; if price holds above breakeven you lose the net premium.
- Two legs mean more charges and a slightly more complex exit.
Build the spread live
See the bear put spread's payoff, breakeven and Greeks on TradePulse's strategy builder.
Related strategies
- Bull Call Spread — the bullish counterpart.
- Long Straddle — profit from a big move either way.
- How to read an option chain