Bear Put Spread
Strategy payoff chart
P/L when all options expire · One spread · Contract multiplier 100
| Side / quantity | Type | Strike | Initial term | Example premium / share |
|---|---|---|---|---|
| Buy 1 | Put | $110 | 30 days | $10.2941 |
| Sell 1 | Put | $90 | 30 days | $0.4006 |
Educational assumptions: entry spot $100, annual IV 30%, risk-free rate 4%, dividend yield 0. Premiums use the European Black–Scholes model, not market quotes. Fees, slippage, margin interest and early exercise are excluded; calculations retain unrounded values.Only the $0–$200 range is shown. Chart edges are not risk limits; an uncovered short call can have unlimited upside losses.
Structure
Buy a higher-strike put and sell a lower-strike put.
Market outlook
Mild to moderate decline.
How it works
The long put benefits from declines; selling the lower-strike put recovers part of the premium.
Features
Limited risk; limited reward; cheaper than a standalone long put; usually negative Delta.
Based on learning material supplied by the site owner, with educational examples. Theta, Vega and Gamma signs describe typical conditions, not permanent properties. Before expiration, P/L also depends on IV, liquidity, assignment, margin and position management.Reference: OIC options strategies ↗