spreadsLow RiskBearish

Bear Put Spread

Buy a put, sell a lower-strike put. Cheaper downside play with capped profit.

Try Bear Put Spread Calculator →← All Strategies

What is a Bear Put Spread?

A bear put spread (also called a long put vertical) is a two-leg options strategy where you buy a put at a higher strike price and sell a put at a lower strike price, both with the same expiration date. The sold put at the lower strike reduces the premium you pay to enter the trade, making it cheaper than a naked long put. In exchange, your maximum profit is capped at the lower strike — you do not benefit from any decline beyond that level. Like the bull call spread, this is a defined-risk, defined-reward position with a clear maximum gain and maximum loss known before entry. The bear put spread is the bearish counterpart to the bull call spread and is one of the most accessible ways to trade a directional move to the downside with limited capital at risk.

When to use it

Use a bear put spread when you have a moderately bearish view — you expect the stock to decline to a specific level but not necessarily collapse. If you expect a catastrophic decline, a naked long put captures more profit because the gain is not capped. The spread is most effective when you have a clear price target for the downside: place the short (lower) put strike at or slightly below where you expect the stock to reach. Bear put spreads are also the right tool when implied volatility is elevated and puts are expensive — the short put at the lower strike offsets some of that premium cost. Choose a spread width that gives you a risk-reward ratio of at least 1:2.

Structure

Buy 1 put at the higher strike (the directional leg) and sell 1 put at the lower strike (the hedge that reduces cost), both with the same expiration. The distance between strikes determines the maximum profit and cost of the trade. Common widths are 5 or 10 points for equity options. Wider spreads offer more profit potential but cost more premium upfront.

Key Metrics

Max Profit
(Higher strike − lower strike − net premium paid) × 100. This is achieved when the stock closes at or below the lower (short) strike at expiration. For example, a $50/$45 bear put spread purchased for $1.50 has a maximum profit of ($50 − $45 − $1.50) × 100 = $350 per contract. Any further decline below $45 does not add to your profit.
Max Loss
Net premium paid × 100. This is the entire debit you paid to enter the spread, lost in full if the stock closes at or above the higher (long) strike at expiration. The maximum loss is completely defined before entering the trade, making position sizing simple and predictable.
Breakeven
Higher strike minus the net premium paid per share. For example, a $50/$45 bear put spread purchased for $1.50 breaks even at $48.50. The stock must fall below $48.50 at expiration to produce any profit. Between $48.50 and $50.00, you recover partial premium but still take a loss.
Greeks Profile
Net delta is negative — the spread profits as the stock falls, with the net delta being less negative than a naked long put at the same strike due to the offsetting short put. Theta is slightly negative in most scenarios — you are a net buyer of options and time decay works against you, though the short put partially offsets this. Vega is positive but moderate — a rise in implied volatility benefits the spread, though less dramatically than a naked put. Gamma is positive near the higher strike and turns negative near the lower strike.

Tips & Best Practices

  • 1Set the short (lower) put strike at your realistic price target — the level you expect the stock to reach, not the level you hope for in a worst case.
  • 2A 1:2 or better risk-reward ratio (maximum profit ≥ 2× maximum loss) is a good benchmark for evaluating entry quality.
  • 3Close the spread at 50–75% of maximum profit rather than holding to expiration to lock in gains and avoid pin risk near the short strike.
  • 4Use on liquid large-cap stocks or ETFs (SPY, QQQ) for tight bid-ask spreads and easy fills on both legs simultaneously.
  • 5Bear put spreads are cheaper than naked long puts — the premium savings from the short put is real, especially in high-IV environments.
  • 6If the stock rallies against you, the maximum loss is already defined — you can hold through the expiration or close early to free up capital.
  • 7Avoid very narrow spreads (1-point width) where commissions make the trade uneconomical — use 5-point or wider spreads instead.
  • 8If the stock collapses well below both strikes before expiration, close the spread for near-maximum value — do not wait for expiration day.

See it in action

Model a Bear Put Spread with a real ticker. See the P&L chart, heatmap, and exact breakevens.

Open Bear Put Spread Calculator →
← Call Spread (Bull)Credit Spread →