Bear Put Spread: Defined-Risk Bearish Strategy

A bear put spread buys a higher-strike put and sells a lower-strike put at the same expiration. Net debit. Max loss = debit. Max gain = strike width minus debit. Mirror image of the bull call spread, applied to a bearish thesis.

Setup: buy the 0.50–0.60 delta put, sell the 0.30–0.40 delta put, 30–60 DTE. Typical use case: a clear bearish thesis on a stock or index, where you want defined risk and don't want to short shares. Pairs well with elevated IV environments — the short put's premium offsets the long put's vega exposure, making the structure more robust to IV changes than a naked long put.

Compare to a bear call credit spread: bear put spread is a debit (pay upfront, profit if stock falls); bear call spread is a credit (collect upfront, profit if stock stays flat or falls). At the same strikes and expiration, both produce identical P&L diagrams — they're synthetically equivalent. Choose based on whether you prefer to pay debit or receive credit, and based on which structure has better fills in the current option chain.

Frequently Asked Questions

Why use a bear put spread instead of just buying puts?

Lower cost, less IV sensitivity, defined max loss. Trade-off is capped upside, which matters less if the stock isn't expected to crash through both strikes.

When should I close a bear put spread?

At 50–80% of max profit. The last 20% of profit takes most of the time and exposes you to whipsaw.

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