Strategy lesson · Spreads · bullish
Bull Put Credit Spread Explained
Credit vertical: sell a higher-strike put and buy a lower-strike put. Bullish/neutral income with defined risk.
How a Bull Put Credit Spread is built
Sell put at K2, buy put at K1 (K2 > K1).
- Leg 1: sell put · strike template 100 · premium ~3.5 · 1 contract(s)
- Leg 2: buy put · strike template 90 · premium ~1.2 · 1 contract(s)
Risk & reward snapshot
| Market bias | bullish |
|---|---|
| Max profit | Net credit received. |
| Max loss | Width − credit. |
| Breakeven | Short put strike − credit. |
Figures are conceptual for the classic structure. Your actual premiums, strikes, and fees change the numbers — confirm on the calculator.
When traders use it
- You expect the stock to stay above the short put strike.
- High IV makes credit attractive versus buying premium.
Key risks
- Fast selloffs can approach max loss quickly.
- Assignment on short put if ITM into expiration.
Practical tips
- Many traders target short deltas around 15–30 and manage winners early — rules vary; model your own.
- Always size off max loss, not credit.
Practice on the calculator
- Open the Bull Put Credit Spread calculator.
- Load a symbol and option chain; fill realistic mid premiums.
- Review max profit, max loss, breakevens, and the date × price heatmap.
- Change strikes and DTE to see how risk shape shifts.
FAQ
What is a Bull Put Credit Spread?
Credit vertical: sell a higher-strike put and buy a lower-strike put. Bullish/neutral income with defined risk.
What is the max loss on a Bull Put Credit Spread?
Width − credit.
When should I use a Bull Put Credit Spread?
You expect the stock to stay above the short put strike. High IV makes credit attractive versus buying premium.