Bull Put Spread: Earn Credit on a Bullish-to-Neutral View
A bull put spread is a credit strategy that profits if the underlying stays above a level. Here's how to build it, with max profit, loss and break-even.
Short answer: A bull put spread (a put credit spread) is built by selling a higher-strike put and buying a lower-strike put of the same expiry. You collect a net credit. It profits if the underlying stays above the short strike, with defined risk — a favourite income trade for a bullish-to-neutral view.
How to build it
- Sell 1 put at a higher strike (closer to the money) — collects premium.
- Buy 1 put at a lower strike (further out) — caps the risk.
- Same expiry → net credit.
The numbers
| Metric | Formula |
|---|---|
| Net received | Credit |
| Max profit | Net credit (kept if price stays above short strike) |
| Max loss | (Higher strike − Lower strike) − Net credit |
| Break-even | Higher strike − Net credit |
When to use it
Use a bull put spread when you're bullish or neutral and want to be paid by time decay. Unlike buying a call, you profit even if the underlying just stays flat — as long as it holds above your short strike. The bought lower put gives margin benefit and caps the loss.
Related structures
- The bearish credit mirror is the bear call spread.
- For a debit bullish play, see the bull call spread.
- Combine a bull put spread + bear call spread → an iron condor.
FAQ
Why sell a spread instead of a naked put? The long put caps your loss and slashes margin. You give up a little credit for a lot less risk.
When do I lose? If the underlying falls below your short strike; the maximum loss is the spread width minus the credit. Manage with an MTM stop.
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