← Back to Options Strategy Guide

A two-leg options strategy that expresses a moderately bearish view with a known, capped cost and a known, capped profit — cheaper to enter than buying a put outright, in exchange for giving up profit beyond the lower strike.

The bearish mirror image of a Bull Call Spread — same structure, opposite direction, built with puts instead of calls.

A Bear Put Spread combines buying one put at a higher strike with selling another put at a lower strike, same expiry. The premium collected from the short put partially offsets the cost of the long put, reducing your net cost compared to just buying a put outright — but it also caps how much you can make, since the short put gives away any gains below its strike.

The long put is what gives you profit as the underlying falls. The short put caps that profit but brings in premium that reduces your total cost — this is what makes it a debit spread: you pay to enter it, the same relationship a Bull Call Spread has to a Bull Put Spread, just mirrored to the bearish side.

You pay a net debit upfront, and profit grows as the underlying falls — but only down to the short strike. Splitting the price axis into three zones at expiry:

1. At or above the long put strike — maximum loss, fully capped. Both puts expire worthless, and you lose exactly the net debit paid.
2. Between the short and long put strikes — profit grows as the underlying falls, moving from max loss toward breakeven and then toward max profit.
3. At or below the short put strike — maximum profit, fully capped and flat. The long put's gains below this point are exactly offset by the short put's losses, so profit stops growing no matter how much further the underlying falls.

A Bear Put Spread fits a moderately bearish view — you expect the underlying to fall, but not necessarily collapse, and you'd rather reduce your cost (and therefore your risk) than pay full price for a put with more downside exposure than you expect to use. As with a Bull Call Spread, it's a reasonable way to express a directional view when implied volatility is elevated, since the short put's premium helps offset the inflated cost of the long put.

Suppose Nifty is trading at 24,000 with a weekly expiry coming up, and lot size is 65. You expect a moderate fall.

1. Confirm the setup. You're moderately bearish on Nifty, but not expecting a huge move.
2. Buy 1 put at the 24,000 strike (at-the-money) for a premium of 140.
3. Sell 1 put at the 23,700 strike for a premium of 58, to offset part of the cost.
4. Calculate the net debit: 140 − 58 = 82 points, or ₹5,330 at this lot size. This is what you pay to enter the trade, and also your maximum possible loss.
5. Calculate the max profit: the spread is 300 points wide, so max profit is (300 − 82) × 65 = ₹14,170.
6. Calculate the breakeven: 24,000 − 82 = 23,918.
7. Hold the position while Nifty moves toward or through your target range.
8. See how it resolves at expiry:
   • Nifty finishes at or above 24,000 → both puts expire worthless, you lose the full ₹5,330 debit.
   • Nifty finishes at 23,918 → you exactly break even.
   • Nifty finishes at or below 23,700 → you keep the full ₹14,170, no matter how much further it falls.

Quick reference for the same trade:

Based on the worked example above. Move the cursor over the chart to see profit/loss at any price.

• You pay upfront, and can lose the entire debit. Unlike a credit spread, there's no premium cushion — if the underlying doesn't move in your favor, you lose what you paid.
• Downside profit is capped. If the underlying falls sharply past the short strike, you don't participate in any of that extra move — a plain long put would have captured it.
• Index options on NSE are typically European-style and cash-settled — no early-assignment risk on the short leg, unlike American-style stock options.
• Time decay works against the net position early on if the underlying doesn't move, though less severely than for a plain long put, since the short leg is also decaying in your favor.