Bull Put Spread Options Strategy Guide
By OptionClaws, VirWare LLC · Published 2026-08-26 · Updated 2026-09-16
A bull put spread, also called a put credit spread, sells a put and buys a cheaper put at a lower strike in the same expiration. The net credit is yours to keep if the stock finishes above the short strike, and the long put caps the loss if it does not. It is the defined-risk cousin of the naked put: you give up some premium to the long leg in exchange for a hard maximum loss and a much smaller margin requirement, which makes it the standard way to sell bullish premium in an account of any size.
Key takeaways
- Sell a put and buy a lower-strike put in the same expiration for a net credit
- Max profit is the credit; max loss is the strike width minus the credit
- Breakeven is the short strike minus the credit
- A defined-risk alternative to a naked put that wins if the stock stays above the short strike
When it makes sense
- You are neutral to bullish and expect the stock to hold above a support level
- Implied volatility is elevated, so the credit is worth the capped upside
- You want strictly defined risk rather than the open-ended exposure of a naked put
- You want to deploy a modest amount of capital per trade and run several at once
Quick reference
| Construction | Short put at a higher strike plus long put at a lower strike, same expiration, one contract each, for a net credit. |
|---|---|
| Max profit | Net credit times 100 per spread, kept if the stock closes at or above the short strike at expiration. |
| Max loss | (Width minus net credit) times 100 per spread, taken if the stock closes at or below the long strike. |
| Breakeven | Short strike minus net credit, per share. |
Assumptions
- Width is the short strike minus the long strike, in dollars per share.
- Net credit is the short put price minus the long put price at fill. The scanner uses the mid on each leg, or the bid on the short leg and the ask on the long leg under conservative pricing.
- Per-spread dollar figures use the standard 100-share multiplier.
- Commissions, assignment and exercise fees, and early assignment are excluded.
How it works
Sell one put at a strike below the current price and buy one put at a lower strike, same expiration. The difference in premiums is the credit. The spread width (short strike minus long strike) times 100 is the capital at risk and, minus the credit, the maximum loss. At expiration: above the short strike both puts expire worthless and you keep the credit; below the long strike both are in the money, the spread is worth its full width, and you lose width minus credit; in between, the loss scales linearly. Breakeven is the short strike minus the credit.
Risk and reward
Maximum profit: the credit received. Maximum loss: (width minus credit) times 100. Breakeven: short strike minus credit. Return on risk is credit divided by max loss; spreads with a short strike near 20 to 30 delta and 20 to 45 days left often land in the 15 to 40% range, though it varies with volatility and width. The probability of keeping the full credit is often approximated as 1 minus the short put's delta. That is a rule of thumb; the scanner's probability of expiring worthless is a direct model estimate instead. Risk and reward are fixed at entry, which is the point: nothing the stock does can cost more than the width minus the credit.
Greeks and volatility
Net delta is positive but small, because the long put offsets part of the short put's delta. Theta is positive and is where most of the profit comes from as the short put decays faster than the long one. Vega is negative: falling implied volatility after entry is a gain, a spike is a paper loss. Gamma is negative and grows as expiration approaches with the stock near the short strike, which is why spreads held to the last days near the money swing violently.
Managing the trade
Closing at 50% of the credit, or when the short put reaches a delta you no longer like, is a common convention. Early assignment of the short put is possible but uncommon unless it is deep in the money with little time value; if it happens, you own 100 shares and still hold the long put, so the risk stays capped, and you can exercise the long put or sell the shares to unwind. Pin risk at expiration is the real hazard: a stock closing between the strikes can leave you assigned on the short put while the long put expires worthless. Close or roll spreads that are near the money on expiration day rather than letting them settle.
Worked example
Stock at $100. Sell the 30-day $95 put and buy the $90 put for a net credit of $1.10 ($110). Width is $5, so maximum loss is ($5.00 minus $1.10) times 100 = $390, and return on risk is $110 / $390 = 28%. Breakeven is $93.90. If the stock finishes at $96, both puts expire worthless and you keep $110. At $92 the spread is worth $3.00 and you lose $190. At or below $90 you lose the full $390.
What to screen for
Screen bull put spreads on probability of profit, return on risk, and distance from the short strike to the stock price in both percent and expected moves (ATRs). Combine with a technical filter, such as stocks above their 50-day average or those that just printed a new 52-week high, to align the spread with the trend. Exclude earnings inside the window unless the premium is the point, and insist on tight spreads on both legs, since you pay the bid-ask twice.
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Frequently asked questions
- What is the maximum loss on a bull put spread?
- The strike width minus the credit received, times 100. A $5-wide spread sold for $1.10 can lose at most $390 per spread.
- What is the breakeven of a put credit spread?
- The short strike minus the net credit. Selling the $95 put for a $1.10 net credit gives a $93.90 breakeven at expiration.
- What happens if the short put is assigned early?
- You buy 100 shares at the short strike, and you still hold the long put, so your loss remains capped. Sell the shares and the long put, or exercise the long put, to close out.
- Bull put spread or naked put?
- The spread has a fixed maximum loss and a small margin requirement; the naked put collects more premium and has a better return on margin but exposes you to the full move to zero and to margin calls.
Related strategies
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Sources
- Bull Put Spread (Credit Put Spread) · Options Industry Council
- Characteristics and Risks of Standardized Options · The Options Clearing Corporation
- Options · FINRA
Last updated 2026-09-16. Educational content, not investment advice. Options involve substantial risk and are not suitable for every investor. See our Terms of Service.