Moderately bearish
Bear Put Spread
Defined-risk way to profit from a drop.
Buy a put and sell a lower-strike put to reduce the cost. You profit as the price falls toward the lower strike, with both your maximum gain and loss capped. The bearish mirror of the bull call spread.
Construction
Buy 1 put + sell 1 lower-strike put.
Max profit
Spread width − net debit
Max loss
Net debit paid
Breakeven
Higher strike − net debit
Play with the payoff
Moderately bearish
At expiryToday (30d, 30% IV)
Max profit
$7.50
Max loss
−$2.50
Breakeven
$97.50
Best when
- You're moderately bearish to a target
- You want defined risk and lower cost than a long put
- You're fine capping the gain