Options Strategies
Bull Put Spread
Strategies Bull Put Spread
Component Buy lower strike price/level put, sell higher strike price/level put of the same month
Potential Profit
  • When the stock price/index level is above the break-even point
  • Limited to the net premium received
Maximum Loss Limited to the difference between the two strike prices/levels minus the net premium received
Time Value Impact Neutral
Break-even Higher strike price/level minus net premium received
Remarks As different from a Bull Call Spread which would result in net premium paid, a Bull Put Spread would result in net premium received, as the premium for the lower strike price/level put is lower than that of the higher strike price/level put.
  Net Position +1 May 180 Put -1 May 210 Put

Component Buy ABC May $180 Put, pay $10, and sell ABC May $210 Put, receive $30
Net Premium Receive $30-$10=$20
Break-even $210-$20=$190
Profit when Stock price is above $190
Potential Profit $20
Potential Loss ($210-$180)-$20=$10
Time Value Impact Neutral