Bull put spread

Also called Put credit spread, short put spread

Selling a put and buying a lower-strike put on the same expiration for a credit; profits if price stays above the short strike.

A bull put spread sells a put and buys a lower-strike put on the same expiration. You collect a credit; the long put caps the loss.

• Max profit: the credit, if price is above the short strike at expiration.
• Max loss: the width between the strikes less the credit, if price is below the long strike.
• Breakeven: the short strike less the credit.

Example: SPY at $600, sell the $590 put and buy the $585 put for a $1.10 credit. Keep $110 per spread if SPY finishes above $590; lose up to $390 if it finishes below $585; break even at $588.90.

It's a bullish-to-neutral trade: it wins if price rises, stays flat, or falls a little. Compared with a cash-secured put, it ties up far less cash and gives up the chance to own the shares.

In Theta Vantage

The strategy calculator builds a bull put spread from its library, with the short put at the edge of the expected move or the delta you pick, and shows its credit, max loss, breakeven, and chance of profit. Check the short strike against the put wall and the low edge of the expected move.