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Vertical Bear Put Spread Strategy

Learn to profit in falling markets by using a vertical bear put spread strategy. Buy in-the-money put options and sell out-of-the-money puts with the same expiration date. If the stock price closes below the out-of-the-money put's strike price on expiration date, maximum profits are achieved.

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Vertical Bear Put Spread Strategy

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  1. Bear Put Spread Ma080106 許琇評

  2. Maximum Loss = 179 • Maximum Profit = 21 • Breakeven Point = 7279

  3. Profit Potential • This strategy requires the investor to buy an in-the-money put option and sell an out-of-the-money put option on the same stock with the same expiration date.  This is also known as a vertical bear put spread. 

  4. If the stock price closes below the out-of-the-money put option strike price on the expiration date, then the investor reaches maximum profits.    

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