Strategy reference
Bear Put Spread
A bear put spread is a two-leg bearish position with capped gain and capped loss. You pay a small net debit for downside exposure between two strikes, capped at the lower strike.
Structure
Buy one put at a higher strike and sell one put at a lower strike, both expiring on the same date. The higher-strike put costs more than the lower-strike put pays, so the position costs you money up front (a net debit).
Payoff at expiration
At expiration, your maximum gain equals the gap between the two strikes minus what you paid up front, which you reach if the stock finishes at or below the lower strike. Your maximum loss equals what you paid, which happens if the stock finishes at or above the higher strike. You break even when the stock finishes at the higher strike minus your initial cost.
- Stock price
- $100
- Buy
- 1 × $100 put @ $3.50
- Sell
- 1 × $95 put @ $1.50
- Net cost (debit)
- $2.00
- Max gain
- $3.00 at S ≤ $95
- Max loss
- $2.00 at S ≥ $100
- Breakeven
- $98.00
Frequently asked questions
What is a bear put spread?
A bear put spread is a two-leg bearish debit position: buy a put at a higher strike and sell a put at a lower strike, both expiring on the same date. You pay a net debit for capped downside exposure.
What is the maximum profit on a bear put spread?
The maximum profit equals the width between strikes minus the net debit. You realize it at any expiration price at or below the lower strike.
What is the maximum loss on a bear put spread?
The maximum loss equals the net debit paid. It occurs at any expiration price at or above the higher strike.
This page is an educational reference, not investment advice. Numbers in the worked example are approximations for illustration only — real option prices depend on volatility, interest rates, dividends, and time to expiration. See the full disclaimer for details.