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Bear Put Spread

Buying a Put at a higher strike and selling a Put at a lower strike (same expiry) — reduces net cost and defines maximum risk for a bearish view.

A Bear Put Spread involves buying a Put at a higher strike (the primary bearish position) while simultaneously selling a Put at a lower strike, same expiry, to partially offset the cost — the mirror image of a Bull Call Spread. Maximum loss is capped at the net premium paid; maximum profit is capped at the difference between strikes minus the net premium paid.

See the full formulas and a worked example in Bull Call Spread and Bear Put Spread Explained.