Bull Put Spread

Description

Selling a higher-strike Put and buying a lower-strike Put.

Trading Logic

Moderately bullish. Earns premium with downside protection.

Practical Example

Stock at $100. Sell $95P ($4), buy $90P ($1). Net credit: $3.

P/L Curve

Chart Description
  • X-Axis: Stock price at expiration
  • Y-Axis: Expected P/L ($)
  • Green area: Profit; Red area: Loss