bullishCollects credit

Bull Put Spread

A bull put spread sells a put and buys a cheaper, lower-strike put as protection. You collect a net credit that you keep if the stock stays above the short strike — a defined-risk way to bet a stock won't fall.

When it makes sense

You're neutral-to-bullish and want probability on your side
IV rank is high, so credit spreads pay well
You want strictly defined risk, unlike a naked put

How it works

Sell a put (usually out of the money), buy a further-OTM put in the same expiration. Max profit is the net credit, earned if the stock closes above the short strike. Max loss is the strike width minus the credit.

Risk & reward

Defined on both sides. A typical setup risks $3–4 to make $1, but wins far more often than it loses — the trade-off is that one full loss can erase several wins. Breakeven is the short strike minus the credit.

Worked example

Stock at $130. Sell the 35-day $120 put, buy the $115 put, for a $1.10 credit ($110). Stock above $120 at expiration: keep $110. Stock below $115: lose $390. Breakeven: $118.90.

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