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Bear put spread

Buy a put, sell a lower put. A cheaper way to bet on a moderate fall.

Lesson 4 of 126 min read

The idea

The mirror of the bull call spread. You expect NIFTY to fall moderately — to around 22,200 — over two weeks. A naked 22400 put costs ₹200.45, but part of that pays for crashes you don't expect. Sell that part.

LegActionOptionPrice
1Buy22400 PE₹200.45
2Sell22200 PE₹121.10
Net debit₹79.35
Cost (1 lot)
₹5,158
79.35 × 65
Max profit
₹7,842
At or below 22,200
Max loss
₹5,158
At or above 22,400
Breakeven
22,320.65
Higher strike − debit
22,400

If NIFTY ends at 22,400, you lose ₹5,158.

Bear put spread 22400/22200. Profit grows as NIFTY falls, until 22,200.
NIFTY at expiryNet P&L (1 lot)
22,800−₹5,157.75
22,400−₹5,157.75
22,300+₹1,342.25
22,200+₹7,842.25
21,800+₹7,842.25

Spotted the symmetry?

These numbers are exactly the bull put spread's, with every sign flipped. That's no coincidence: the bear put spread is the very same two options, but you bought the one the bull-put trader sold and sold the one they bought. One trader's spread is the other's mirror.

Same strikes 22400/22200You…UpfrontWins when NIFTY…
Bull put spreadSell 22400, buy 22200Receive ₹79.35stays above 22,320.65
Bear put spreadBuy 22400, sell 22200Pay ₹79.35falls below 22,320.65

When to use it

  • You expect a fall, but a measured one.
  • Options aren't cheap, so a naked put feels pricey.
  • You want a defined worst case and a defined best case — no surprises.

Quick check

What's the most this 22400/22200 bear put spread can make, per unit?