Bear Put Spread Calculator

Bear Put Spread

A bear put spread is a defined-risk options strategy used when you are moderately bearish on a stock. You buy a put at a higher strike (K1) and sell a put at a lower strike (K2) with the same expiration. The premium received for the sold put reduces the cost of the bought put.

Key levels:

P&L at expiration:

• Stock at or above K1: Full net premium lost (max loss)
• Stock between K1 and K2: Partial profit: (K1 - S - Net premium) × 100
• Stock at or below K2: Maximum profit locked in

Example:

• Buy 150 put at $7.00, sell 140 put at $2.50
• Net premium = $7.00 - $2.50 = $4.50 per share ($450 per contract)
• Breakeven = 150 - 4.50 = $145.50
• Max profit = (150 - 140 - 4.50) × 100 = $550 per contract
• Max loss = $450 per contract

Bear put spread vs buying a put outright:

• Costs less: the sold put offsets part of the premium
• Defined risk and defined reward: you know your maximum loss upfront
• Tradeoff: you cap your profit at K2 (you give up gains below that level)

When to use it:

• You expect a moderate decline: not a crash
• Implied volatility is expensive: selling a put lowers your cost basis
• You want defined risk rather than unlimited downside protection

Compare to Bull Call Spread:

Both are vertical debit spreads. A bull call spread profits from a rise, a bear put spread from a decline, and both have defined max profit and max loss before entry.

There is a sharper connection than that, though. Buying the 160 put and selling the 150 put is the mirror of selling the 160 call and buying the 150 call, and put-call parity ties the two prices together exactly. The debits on a bull call spread and a bear put spread across the same pair of strikes must sum to the spread width discounted to today:

Bull call debit + bear put debit = (K1 - K2) × e^(-rT)

On a $10-wide spread at 5% with six months left, that is $9.75 rather than $10. So the bear put spread’s max profit lands roughly $25 per contract away from the bull call spread’s max loss. Neither calculator is wrong when you see that; the gap is the interest on the money over the life of the trade.

The invariant to check your own numbers against: max profit plus max loss always equals the spread width times 100 per contract. Here that is (150 - 140) × 100 = $1,000, and $550 + $450 lands on it. If your two figures do not add to the spread width, something went in wrong.