Bear Put Spread Calculator

A bear put spread, also called a put vertical spread, buys one put and sells a lower strike put with the same expiry. It is a cheaper way to bet on a decline, with profit capped at the lower strike.

How a bear put spread works

  • Buy a put at the higher strike.
  • Sell a put at the lower strike, same expiry.
  • Net debit = long put price − short put price. That is your max loss.
  • Max profit = (strike width − net debit) × 100 × contracts, reached at or below the lower strike at expiry.
  • Breakeven at expiry = higher strike − net debit.

Example

Stock at $100, 45 days to expiry, IV 40%. Buy the $100 put, sell the $90 put. Net debit about $3.70, so one spread costs $370.

  • Breakeven at expiry: $96.30
  • Max profit: about $630, or 170% ROI, at $90 or lower at expiry
  • At your target of $90 in 30 days, the spread is worth about $7.53: 103% ROI before expiry

The target test says Realistic: a fall to $90 in 30 days is 0.92 standard deviations.

When I use it

On the short side of my book, I use a put vertical when puts are expensive, for example after a stock has already started falling and IV has jumped. The short put sells some of that rich volatility back and lowers the cost.

Same strike rule as on the long side: the short strike at the strike nearest my downside target, the long strike one or two strikes toward the current price.

Compare with a single put option to see what the cap costs you.

FAQ

What is a bear put spread? A bearish options strategy: buy a put and sell a lower strike put with the same expiry. It costs less than a single put and caps both profit and loss.

Is a put vertical spread the same as a bear put spread? Yes. With the higher strike put bought and the lower strike put sold, the put vertical is a bear put spread, also called a put debit spread.

What is the max profit on a bear put spread? The strike width minus the net debit, times 100 times contracts, if the stock is at or below the lower strike at expiry.

What happens if the stock rises? Both puts lose value. The most you can lose is the net debit.

Other calculators

See all of them on the free tools page.

Educational tool only. Not investment advice. Prices are Black Scholes estimates, not live quotes. See the Disclaimer.