What is a bear put spread?
A bear put spread is the mirror of a bull call spread. You buy a put at a higher strike and sell a put at a lower strike in the same expiration, for a net debit.
The short put funds part of the long put. Your cost drops, your maximum gain is fixed at the strike width minus the debit, and your loss can never exceed what you paid.
When traders use it
Traders use it for a measured downside view rather than an open-ended one.
- You expect a decline to a level you can name.
- Puts are expensive and you want to cut the cost of the position.
- You want the worst case fixed before you enter.
The P/L shape
The payoff ramps up as the stock falls between the strikes, then goes flat below the lower one.
Worked example. XYZ trades at $100. You buy the $100 put and sell the $90 put for a net debit of $3.60, or $360.
- Max profit
- $640 — the $1,000 strike width minus the $360 debit
- Max loss
- $360 — the debit, if XYZ closes at or above $100
- Breakeven
- $96.40 — higher strike minus the debit
Below $90 the spread is worth its full $1,000 and you keep $640 however far the stock falls. The move has to reach $96.40 by expiration before you make anything.
Greeks and time decay
Net delta is negative but muted, because the short put cancels part of the long put's exposure. The position is most sensitive when the stock sits between the strikes.
Theta works against you while the stock is above the long strike. Net vega is slightly positive, so a rise in implied volatility usually helps a little. Neither Greek dominates — direction does.
Build it in DeltaForm
- Open the builder and choose the symbol and expiration.
- Add a long put at the higher strike.
- Add a short put at the lower strike, same expiration.
- Read the debit and the breakeven off the payoff curve.
- Move the date forward to see the spread converge as expiration nears.
Frequently asked questions
Is a bear put spread the same as a bear call spread?
They express the same view but not the same way. A bear put spread is a debit — you pay up front. A bear call spread is a credit — you are paid up front and profit if nothing happens.
Do I need approval to trade this?
Spreads usually require a higher options approval level than buying a single option. Check with your broker. DeltaForm models the position and does not place trades.
What if the stock gaps below both strikes early?
The spread will be worth close to its full width, but not exactly — time value keeps a little of it back until expiration. Step the date forward in the model to see how much.