Strategy guide
Bear put spread explained
A bear put spread buys a put at a higher strike and sells a put at a lower strike, both with the same expiration. The short put's premium lowers the cost of the long put, capping both potential profit and loss. It profits from a moderate decline in the stock, with a defined maximum gain and loss set the moment the trade opens.
By Option Ideas Editorial Team · Published September 2, 2026
The formulas
- Max profit (capped)
- (Long strike − short strike) × 100 − net debit paid.
- Max loss (capped)
- The net debit paid, in full -- this is the most the position can lose.
- Breakeven
- Long strike − net debit per share.
- Market view
- Bearish, but not expecting a collapse -- the short strike is where the thesis "pays off in full."
A worked example
Illustrative numbers, not live quotes -- for that, see the real, current option chain on the ideas page.
| Stock trading at | $100 |
| Buy | 1x $100 put for $5.00 |
| Sell | 1x $90 put for $2.00 — net debit $3.00 ($300) |
| Width | $10 × 100 = $1,000 |
| Max profit | $1,000 − $300 = $700, if the stock closes at or below $90 |
| Max loss | $300, if the stock closes at or above $100 |
| Breakeven | $100 − $3.00 = $97 |
Risks and assumptions
- Debit paid is at risk in full if the stock closes at or above the long strike at expiration.
- The short put caps profit below its strike -- a sharp decline does not add extra profit past that point.
- Both legs need a real, liquid market to enter and exit at a fair price; a wide bid/ask spread on either leg erodes the edge the structure is meant to provide.
FAQ
Why buy a spread instead of just the put?
The short put's premium partially pays for the long put, lowering the cost and raising the breakeven price closer to today's stock price -- at the cost of capping how much the position can make below the short strike.
What happens if the stock finishes between the two strikes?
The long put has intrinsic value, the short put expires worthless, and the position is worth the difference between the long strike and the stock price, up to the width of the spread.
Is a bear put spread the same as buying a protective put?
No. A protective put is bought against stock you already own, to limit downside on a position you want to keep. A bear put spread owns no stock -- it's a standalone bearish bet with a capped cost and capped payoff.
Primary references
Not hyperlinked deliberately -- verify current material directly on each organization's own site.
- The Options Clearing Corporation (OCC)
- Cboe Options Institute