Bear put spread strategy — how it works
A bear put spread is a defined-risk bearish strategy — buy a put and sell a lower put. Learn the payoff and how to build it.
A bear put spread is the bearish mirror of the bull call spread: you buy a put and sell a lower-strike put (same expiry). It profits when the price falls, with defined risk and a lower cost than a naked put.
The two legs
- Buy a put (higher strike) — your bearish bet
- Sell a put (lower strike) — collects premium, lowers cost
Payoff
- Max loss: the net premium paid (limited).
- Max profit: the strike difference minus net premium — reached below the lower strike.
- Breakeven: higher strike − net premium.
When to use it
When you're moderately bearish — expecting a fall but wanting cheaper, capped-risk exposure than buying a put outright.
How to build it
Open the Strategy Builder, add both put legs, review the payoff and deploy.
FAQ
When does a bear put spread profit?
When the underlying falls toward or below the lower strike by expiry.
Is the risk limited?
Yes — the maximum loss is the net premium paid.
How is it different from buying a put?
Cheaper and capped-risk, but the maximum profit is limited.