Bull Put Spread
Sell higher strike Put, buy lower strike Put
Positions in Chart: Sell 1 lot of 25600 PE, Buy 1 lot of 25400 PE. Spot price: 25800
Setup
Sell higher strike OTM Put + Buy lower strike OTM Put
When to Use
- Moderate bullish outlook with income generation
Market Outlook
Volatility Expectation→Expected to Remain Stable
Price Direction↗Expected to Rise Moderately
Risk & Reward
Breakeven PointHigher Strike - Net Premium Received
Max Contract LossStrike Difference - Net Premium Received
Max Position LossSame as Max Contract Loss
Strategy Details
Complexity LevelIntermediate
DirectionSteady Bullish
VolatilityNeutral
Number of Legs2 Leg
Strategy TypeCredit
Hedging CapabilityMinor Hedging
Description
A bull put spread involves selling a put at a higher strike and buying a put at a lower strike
Example
If NIFTY is at ₹25,800, you sell a ₹25,600 Put for ₹70 and buy a ₹25,400 Put for ₹40, receiving ₹30 net credit. Maximum profit is ₹30 if NIFTY stays above ₹25,600.
This information is for educational purposes only and should not be considered as financial advice. Always consult with a qualified financial advisor before making investment decisions. Data is constructed and is not actual. Calculations may have errors.
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