A bull put spread sells a put and buys a lower one for protection, collecting a credit up front. You keep the credit as long as the underlying stays above your short strike — it does not need to rise, only to avoid falling. That is why credit spreads are described as high-probability: two of the three possible outcomes pay you.
Outlook: Bullish / neutral
Max profit
—
best case at expiry
Max loss
—
worst case at expiry
Breakeven
—
where the trade turns even
Net debit / credit
—
to open the position
Your bull put spread
Per-share premiums. One contract = 100 shares.
100 shares per contract
Profit at expiryLoss at expiryBreakevenStrikes & spot
How a bull put spread pays
Net credit = premium collected − premium paid
Max profit = net credit × 100 × contracts
Max loss = (strike width − net credit) × 100 × contracts
Breakeven = short put strike − net credit
Time is on your side. Unlike a debit spread, decay works for you — each day the options you sold lose value you keep.
You risk more than you make. The structural trade-off of every credit spread: a $2.50 credit on a $10 spread risks $750 to make $250.
Sideways is a win. You do not need the stock to rise. Flat, or even modestly down, still pays the full credit.
Worth naming. The high win rate is the trap. Winning four times out of five feels like an edge, but if the fifth loss is three times the size of each win, the strategy is flat at best. Position size against the max loss, never against the credit.
What this does not model
Every figure here is the payoff at expiry. Before then your position is marked at market prices that still carry time value, so a trade can show a loss while sitting exactly where you wanted it — falling implied volatility alone will do that.
Short legs carry assignment risk. American-style options can be exercised at any time, most commonly on in-the-money calls just before an ex-dividend date. The diagram assumes you hold every leg to expiry.
For the live version — real Greeks, current marks and what-if scenarios against actual
chain data — that is what the GreeksView desk does, in your
browser, on your own broker keys.
Frequently asked questions
What is the maximum loss on a bull put spread?
The strike width minus the net credit, times 100 per contract. Selling the 100 put for $3.80 and buying the 90 for $1.30 gives a $2.50 credit on a $10 spread, so the most you can lose is $750 — at or below 90 at expiry.
What is the breakeven on a bull put spread?
The short put's strike minus the net credit: 100 − 2.50 = $97.50. Above that at expiry, the position makes money; below it, the credit no longer covers the loss.
How is this different from a cash-secured put?
The long put. A cash-secured put has no lower protection, so your risk runs all the way to zero and you must hold cash for the full assignment. The bull put spread caps the loss at the strike width, which frees up capital but costs part of the premium.
What is return on risk, and what is a reasonable one?
Credit divided by max loss — $250 on $750 of risk is a 33% return on risk. There is no universally right number: higher returns mean strikes closer to the money and a higher chance of being tested. The ratio is only meaningful next to the probability of finishing above the short strike.
Are commissions included in these numbers?
No — every figure is gross. On multi-leg positions this matters more than people expect: four legs to open and four to close is eight commissions against what may be a couple of hundred dollars of credit. Check your broker's per-contract rate against the max profit shown here before deciding a trade is worth putting on.
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