Strategy Overview
Medium RiskIntermediateBullishNeutral
A bull put spread is a credit spread that profits from neutral to bullish movement. You sell a higher strike put and buy a lower strike put, collecting premium with defined risk.
Max Profit
Premium received
Max Loss
Width of spread - premium received
Breakeven
Short strike - premium received
Probability
~65% win rate
hist. est.
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Example Setup Calculator
$
Credit Received
$250
Max Profit
$250
Max Loss
$250
Breakeven
$97.50 / $102.50
Strategy Components
SELL OTM PUT
Sell OTM put for credit
BUY OTM PUT
Buy further OTM put for protection
When to Use
- You are neutral to bullish on the stock
- You want to collect premium with defined risk
- IV is elevated for better premiums
- You want high probability of profit
Best Market Conditions
- Elevated IV rank
- Bullish or neutral bias
- Clear support levels defined
Best Practices
- Place short strike below support level
- Target 30-45 DTE for optimal time decay
- Manage at 50% of max profit
- Consider rolling if tested
Ready to Trade?
Review Bull Put Spread and practice it in paper trading with the school workflow.
Paper Trading