Buy a put at the higher strike and sell a put at the lower strike. It gains from a limited drop, at a lower cost than a Long Put alone.
The structure
A Bear Put Spread (Bear Put Spread) is the bearish mirror of the bull spread: buy a nearby put and sell another with a lower strike, same expiration. The lower sold put cuts the cost in exchange for a profit cap at its level.
When to use it
A bearish view toward a specific level: a broken support heading to its target, or a limited pullback you expect. Cheaper than a single long put and more disciplined than a short sale, with the loss capped in advance.
Maximum profit and loss
Maximum loss is the net amount paid. Maximum profit is the gap between the two strikes minus the amount paid, reached at the lower strike or below. Breakeven is the higher strike minus the net cost.
Hypothetical example
Stock at $90 with a target of $80: buy a put at strike $90 for $3.50 and sell a put at strike $80 for $1. The net cost is $2.50, the maximum profit is $7.50 at the lower strike or below, and breakeven is $87.50.
Common mistake
Using it for an all-out crash bet. Its cap cuts off the payoff of the disaster the bet was built for. For distant tail bets, a single long put or other structures fit better. For a measured decline, this one suits.
When to choose it over a short sale
When you want a bearish bet with a capped loss: the bought leg sets the maximum loss up front instead of leaving the exposure open. The price is a profit cap at the sold leg. You give up a rare extended move in return for sleeping well.
Where to see it on the platform
The options calculator builds it in the Strategies tab with its full payoff chart, and Gamma tools help pick the target, since the Put Wall often marks the bottom of the structural range.
The structure calculator builds it with both legs and draws its limits. The strategy guide compares it with alternatives using your inputs.
