Strategy reference
Bull Put Spread
A bull put spread is a two-leg bullish position with capped gain and capped loss. You collect a credit up front; you keep it if the stock stays above the higher strike.
Structure
Sell one put at a higher strike and buy one put at a lower strike, both expiring on the same date. The higher-strike put pays you more than the lower-strike put costs, so you collect money up front (a net credit).
Payoff at expiration
At expiration, your maximum gain equals the credit you collected — you keep it if the stock finishes at or above the higher strike. Your maximum loss equals the gap between the two strikes minus your credit, which happens if the stock finishes at or below the lower strike. You break even when the stock finishes at the higher strike minus your credit.
- Stock price
- $100
- Sell
- 1 × $100 put @ $3.50
- Buy
- 1 × $95 put @ $1.50
- Net credit
- $2.00
- Max gain
- $2.00 at S ≥ $100
- Max loss
- $3.00 at S ≤ $95
- Breakeven
- $98.00
Frequently asked questions
What is a bull put spread?
A bull put spread is a two-leg bullish credit position: sell a put at a higher strike and buy a put at a lower strike, both expiring on the same date. You keep the credit if the stock stays above the higher strike.
What is the maximum profit on a bull put spread?
The maximum profit is the net credit collected. You realize it at any expiration price at or above the higher strike.
What is the maximum loss on a bull put spread?
The maximum loss equals the width between strikes minus the credit collected. It occurs at any expiration price at or below the lower 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.