What is a bull put spread, in plain words?
A bull put spread is selling a put and buying a put with a lower strike, with the same expiry, for a credit received at the outset 1. The credit is the most it can make; the most it can lose is the gap between the strikes minus the credit; it breaks even at the higher strike minus the credit 1.
A $48 put sold and a $45 put bought, both with 30 days left at 30% implied volatility on a $50 stock (made-up numbers). Move where the stock ends at expiry.
In numbers
By the formula the $48 put sells for $0.81 and the $45 put costs $0.20 2: a credit of $0.61 a share, $61 a contract. The most it can lose is $3 − $0.61 = $2.39 a share, and it breaks even at $47.39 1.
Against a cash-secured put
The $45 put bought caps the loss below $45, for part of the premium. Selling the $48 put alone collects more but can lose far more if the stock falls a long way 3.
What this shows, and what it doesn't
The result at expiry, a share, before fees and the bid-ask spread on two options. The put sold can be exercised against you before expiry 4: you would then buy 100 shares at $48 ($4,800), while the $45 put you hold still caps the loss.
Go further
Sources (4), checked 20 October 2026 and 27 October 2026
- Fidelity, “Options strategy: The bull put spread” (Viewpoints, 25 January 2025). Read it (read 27 October 2026)
- Fischer Black and Myron Scholes, “The Pricing of Options and Corporate Liabilities”, Journal of Political Economy 81(3), 637–654, 1973. Read it (read 20 October 2026)
- Montréal Exchange, “Cash-Secured Put” (equity options strategy sheet). Read it (read 27 October 2026)
- FINRA, “Trading Options: Understanding Assignment” (14 December 2020). Read it (read 27 October 2026)
Now try it on a scenario of your own
Pick where a simulated stock might be, and by when: drag one dot and see, side by side, what buying shares, one option, or a pair of options (a call or put spread) would each do. Free, no sign-up.
Check a trade before you make it →