Chapter 11 | Bear Put Spread | Prebuilt Options Trading Strategies

A bear put spread consists of, one long put with a higher strike price, and one short put with a lower strike price. Both puts have the same underlying stock, and the same expiration date. A bear put spread is established, for a net debit (or net cost) and profits, as the underlying stock declines in price. Profit is limited if the stock price falls, below the strike price of the short put (lower strike), and potential loss is limited, if the stock price rises above the strike price of the long put (higher strike).