Bear Put Spread
Buying a put at one strike and writing a put at a lower strike with the same expiry, capping both cost and gain.
Formula
Net Debit = Higher Strike Premium - Lower Strike Premium; Maximum Gain = (Strike Difference - Net Debit) x Lot Size
Unit
₹
In depth
The mirror of the bull call spread, structured for a view that the underlying falls, with the written lower-strike put reducing the cost and capping the gain. Because both legs decay, the position is far less sensitive to time than a lone long put, which is its main practical advantage. It is bounded on both sides, so the maximum loss is known at inception and equals the net debit. As with every spread here, this entry describes the payoff structure and does not suggest taking the position.
Worked example
Buy a 24,000 put at 165 and write a 23,600 put at 70: net debit 95, or ₹7,125 per lot. Maximum gain is (400 - 95) x 75 = ₹22,875, break-even is 23,905, and above 24,000 the full ₹7,125 is lost.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Bear Put Spread” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.