Bear Spread
An options strategy that profits from a decline in the underlying asset price.
Explanation
A bear spread can be constructed with either puts (bear put spread / debit) or calls (bear call spread / credit). The strategy involves buying one option and selling another at a different strike, both with the same expiration. It limits both potential profit and potential loss.
Example
Buy the 150 put and sell the 145 put on AAPL for a net debit of $1.80. Max profit is $3.20 (spread width minus debit) if AAPL drops below $145.