A bear put spread is bearish and built for a debit. You buy a higher-strike put and sell a lower-strike put, with capped, known risk and reward from t…
Bets on a drop with capped risk and reward, paying a debit.
Curve at expiration · dashed line = breakeven · gold ticks = strikes
A bear put spread is bearish and built for a debit. You buy a higher-strike put and sell a lower-strike put, with capped, known risk and reward from the start.
Use it when you expect a moderate drop by expiration. The short put funds part of the purchase; in return, profit stops growing below K2.
With the example values already loaded in the calculator above, this strategy returns:
The numbers above come from the same engine as the calculator — change the fields to see your own scenario.
The max loss is the debit paid and happens if the underlying closes above K1. The breakeven is K1 − debit.
The put version is a debit with capped downside profit; the call version is a credit. Compare the risk/reward at entry.
Both puts lose value and you lose the debit paid, nothing more.