Put spreads: Bull vs. bear put spreads explained

A put spread combines two puts with the same expiration but different strikes. Depending on which put you buy and which you sell, it can suit a bullish-to-neutral or bearish view. Here’s how bull and bear put spreads differ and where to find Put Spread in the Bybit App.

Key Takeaways:

• A put spread pairs long and short puts with the same expiration and different strikes.

• Bull put spreads usually open for a net credit; bear put spreads usually open for a net debit.

• With matched quantities, both strategies cap profit and loss at expiration, before fees.

What is a put spread?

A vertical put spread uses two puts on the same underlying. They share an expiration date but have different strikes.

With matched quantities, the long and short puts work together to cap both potential profit and loss at expiration.

A put spread may open for a net debit or net credit. A net debit means premiums paid exceed premiums received. A net credit means premiums received exceed premiums paid. Both calculations exclude fees.

Bull vs. bear put spreads

Which put you buy and which you sell determines whether the spread is bullish or bearish.

For a bull put spread, maximum loss is the strike width minus the credit. For a bear put spread, it is the debit paid. These figures assume matched quantities and holding until expiration.

How put-spread strikes change the trade-off

The gap between the strikes changes the payoff, but the premium matters too. A wider spread is not automatically better.

Consider a hypothetical bear put spread with $100 and $90 strikes. If the long put costs $8 and the short put receives $3, the net debit is $5. The maximum loss is $5, while the maximum profit is also $5. The breakeven is $95. This example assumes one unit and excludes fees.

For a bull put spread, the strikes and credit set the breakeven and maximum loss.

When traders use put spreads

A bull put spread is generally used when you expect the underlying price to settle above a chosen level at expiration. A bear put spread is used when you expect the price to fall.

Before expiry, the spread’s value can also change with time, implied volatility and market liquidity.

How to access Put Spread on Bybit

Follow these steps in the Bybit App:

1. Tap Trade, then select Options

2. Switch from Easy to Pro, then open the Strategies tab

3. Select Put Spread and tap Trade Now

4. Choose whether to buy or sell each call, then set the strikes, expiry and quantities

5. Review the payoff and margin information before submitting the strategy

Note: Under Portfolio Margin, Bybit cannot calculate margin before you submit the order. App labels and availability may vary by account or region.

The bottom line

Put spreads pair a long and short put to cap profit and loss at expiration. Bull put spreads usually collect a credit, while bear put spreads usually cost a debit.

Before placing one, check the strikes, premium, breakeven and payoff limits. For more on trading options, see Bybit Options.

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