Options Education Concepts
Want to know more about options trading? Go to the Optionetics.com full site.
Bear Put Spread
A bear put spread is a debit spread created by purchasing a higher strike put and selling a lower strike put with the same expiration dates. This strategy is best implemented in a moderately bearish market. It provides high leverage over a limited range of stock prices. The profit on this strategy can increase by as much as 1 point for each 1-point increase in the price of the underlying. However, the total investment is usually far less than that required to buy the stock shares. The strategy has both limited profit potential and limited downside risk.