Bull 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 |
|---|---|---|---|---|
| Sell 1 | Put | $100 | 30 days | $3.2629 |
| Buy 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
Sell a higher-strike put and buy a lower-strike put for protection.
Market outlook
Rising, sideways or slightly declining prices.
How it works
Collect time value from the short put. If the stock stays above its strike at expiration, the spread retains its full net premium.
Features
Credit strategy; positive Theta in typical conditions; limited risk and reward.
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 ↗