Learn / Options / Bull put spread
Bull put spread
You sell a put and buy a lower one. You take in a credit, and you want the stock to stay up.
By M.M. · Published 5 Nov 2026
What it is
A bull put spread is a credit put spread. You sell the higher strike put and buy a lower strike put with the same expiry. Cash comes in at the start. The bought put is the fence. It keeps a sharp drop from becoming an open loss.
If both puts expire, the credit is your profit. The most you can lose at expiry is the gap between the strikes, minus that credit. You lose the most when the stock finishes at or below the lower strike.
When people use it
People use it when they expect the stock to hold a level or rise a bit, and they would rather be paid to wait than pay a debit. It is a common choice when the expected move is small and they are willing to be wrong only down to the long put.
A $100 stock
Take a stock at $100. Volatility is 25 percent, the risk-free rate is 4 percent, and expiry is 30 days out.
Sell the 95 put for $0.90 and buy the 90 put for $0.19.
At or above 95 both puts expire and the credit is the profit. At or below 90 the loss is capped. You take in a net credit of $0.70. At expiry it breaks even at $94.30. The most you can make at expiry is $0.70. The most you can lose at expiry is $4.30.
The model uses one volatility for every strike, a flat risk-free rate, and no dividend. A live option quote will differ. Each contract here covers one share. A listed equity contract usually covers 100 shares.
Risks
The credit is small next to the worst loss. One bad week can give back the credit and more. The trade wins often and loses larger, which is easy to misread if you only count the winning months.
The short put can be assigned early. You may have to buy shares at the higher strike while the long put is still there as protection. This model also ignores commissions. Four trades in and out cost real money on a small credit.
Try this plan
The builder below starts on this spread at a $100 stock. Change the ticker or the legs, then copy the share link. The same tool lives at the options payoff builder.
Education only. Prices are theoretical Black-Scholes values, not live option quotes, and this is not investment advice.
Type a ticker to fill the spot from the quote, or enter the spot yourself.
| Leg | Premium | Delta | Theta / day |
|---|---|---|---|
| short 1 put $95.00 / 30d | $0.90 | -0.213 | -$0.032 |
| long 1 put $90.00 / 30d | $0.19 | -0.060 | -$0.014 |
This is a bull put spread. You are short 1 put at $95.00 and long 1 put at $90.00. They all expire in 30 days. The options bring in a net credit of $0.70. At expiry it breaks even at $94.30. The most you can make at expiry is $0.70. The most you can lose at expiry is $4.30. Model delta is 0.152. Model theta is $0.019 per day.
Payoff
At $100.00, expiry P&L $0.70, today $0.00.
| Stock | At expiry | Today |
|---|---|---|
| $70.00 | -$4.30 | -$4.28 |
| $76.25 | -$4.30 | -$4.26 |
| $82.50 | -$4.30 | -$3.98 |
| $88.75 | -$4.30 | -$2.83 |
| $95.00 | $0.70 | -$1.06 |
| $101.25 | $0.70 | $0.17 |
| $107.50 | $0.70 | $0.61 |
| $113.75 | $0.70 | $0.69 |
| $120.00 | $0.70 | $0.70 |
The model uses one volatility for every strike, a flat risk-free rate, and no dividend. A live option quote will differ. Each contract here covers one share. A listed equity contract usually covers 100 shares.