Bull Put Spread (Credit)

Sell a put and buy a lower put to collect premium with a bullish-to-neutral bias and defined risk.

A bull put spread (put credit spread) sells a put and buys a lower-strike put for protection. You collect a net credit and profit if the stock stays above your short strike.

Market outlook

Neutral to bullish — you expect the stock to hold above the short put strike. You win if it rises, stays flat, or even drifts down slightly.

Construction

• Sell 1 put at higher strike $K_2$.
• Buy 1 put at lower strike $K_1$ ($K_1 < K_2$).
• Net credit $C = P_2 - P_1$.

Risk / reward

• Max profit: $C$, kept if the stock closes at or above $K_2$.
• Max loss: $(K_2 - K_1) - C$
• Breakeven: $\text{BE} = K_2 - C$

When to use it

• A high-IV environment (you're a net premium seller).
• You're bullish/neutral and want theta working for you with capped risk.

Risks & management

• Losses come fast if the stock breaks below $K_2$; the long put caps them at $K_1$.
• Popular management: sell ~30–45 DTE near 0.30 delta, take profit at ~50% of the credit, and defend or close before expiry.