options strategy
Bull Put Spread
A bullish credit spread that profits when the underlying stays above the short put strike.
Max profit
Net credit received
Max loss
Spread width − net credit
Breakeven(s)
Short put strike − net credit
What is a bull put spread?
A bull put spread (also called a short put spread or put credit spread) is a two-leg options strategy where you sell a put at a higher strike and buy a put at a lower strike, both at the same expiry. You collect a net credit upfront.
The trade profits when the underlying closes above your short put strike at expiry, allowing both puts to expire worthless and letting you keep the full credit. Your long put acts as protection, defining your maximum loss.
When to use it
Use a bull put spread when you expect the underlying to stay flat or rise, but want defined risk rather than selling a naked put. It works best when implied volatility is elevated, increasing the credit you receive.
It's particularly useful when you want bullish exposure with a known worst-case scenario — the long put eliminates the tail risk of a naked put.
Construction
1. Sell a put at the higher strike (your income leg — this is where your breakeven sits)
2. Buy a put at the lower strike, same expiry (your protection leg)
The spread width is the difference between the two strikes. Wider spreads collect more credit but carry higher maximum loss.
Profit, loss, and breakeven
Max profit: the net credit received. Achieved if the stock closes at or above the short put strike at expiry.
Max loss: spread width minus the net credit. Achieved if the stock closes at or below the long put strike at expiry.
Breakeven: short put strike minus the net credit received.
Key risks
If the underlying falls sharply and closes below the short put strike, the spread moves against you. Your loss is limited to the spread width minus credit, but that can still be several times the credit received.
Time decay (theta) works in your favour as the seller of the net spread — the position gains value as the options decay toward expiry, all else equal.
Model it yourself
Open the Vega Lab dashboard, enter a ticker, and load a live option chain to build a bull put spread with real strikes and premiums. The payoff chart and heatmap update in real time as you adjust each leg.
Open dashboard →