Bear Put Spread Options Strategy (TUTORIAL + TRADE EXAMPLES)

Share it with your friends Like

Thanks! Share it with your friends!

Close

Get ONE paid projectoption course for FREE when you open and fund your first tastyworks brokerage account with $2,000 or more: https://www.projectoption.com/free-options-trading-course/

Learn More About tastyworks & Their Competitive Commissions: https://www.projectoption.com/tastyworks/

Open a tastyworks Account: https://start.tastyworks.com/#/login?referralCode=PROJECTOPTION

====

The bear put spread is a bearish options strategy consisting of two separate put option transactions. One put option is purchased and another put option at a lower strike price is sold (same expiration cycle).

The bear put spread is one of the four vertical spread strategies.

The strategy has many other names that options traders use, including the long put spread, put debit spread, and simply buying a put spread.

In this video, we’ll cover:

– Bear put spread explained (setup, explanation, max profit potential, max loss potential, breakevens)

– Historical trade examples so you can see exactly how the bear put vertical spread strategy has performed in the past in various scenarios.

– A demonstration of setting up a long put spread on the tastyworks trading platform.

Be sure to leave a comment down below with any questions you may have!

=== RECOMMENDED VIDEOS/RESOURCES ===

Options Trading For Beginners (PLAYLIST): https://www.youtube.com/playlist?list=PL33AZa4cv-o58ldr-5zSn4ROx4SZG7Jyo

tastyworks Tutorials (PLAYLIST): https://www.youtube.com/playlist?list=PL33AZa4cv-o56a2BO3jpK_PBUFe3FdvxP

Option Pricing EXPLAINED: https://youtu.be/-nnJ4pMBaxA

Options Trading 101: https://youtu.be/3bELT5FZCic

COURSES: https://www.projectoption.com/options-trading-courses/

Comments

Simon Ribas says:

pls dont stop making videos man you have no idea how much we appreciate you

Bigfish Tuna says:

Great video. But do you ever look at options strategies involving selling deep in the money puts – I just noticed that jul 24 TSLA 1900 puts are around $305. I don't want to do anything stupid (been there done that) – but I was wondering if there was a safer strategy to take advantage of some of that premium. Apart from selling the put –  can you Suggest a hedging strategy to cast a wide net selling these high value puts – buy calls? spreads. Thanks for any example.

wholeycheese says:

Seems almost more risky than naked puts or calls. Just because you have to wait until expiration, where as naked you can get out at any time, barring a big change in the stock.

Maha Al says:

Iherb discount code ASF2633

Penny Lau says:

HI Chris, Thank you so much for your video. Just one question, If i have a bearish decision of a stock, and i want to do a put spread. How to pick a put spread? in the money or out of money put spread? How far the distance between the buy put and sell put? Thank you so much your time.

Tuan Pham says:

Truly appreciate your videos.

Arturo Aramburo says:

Very well explained. I am new to options.

When you say: “For a spread to reach its maximum profit level, all of extrinsic values must come from the option”. Are those extrinsic calculated values coming from some mathematical twick handled by the broker? All is clear except that. That area in between both strike prices. I would expect the breakeven point to be the precise In the Money Transition, but in your graph, you represent that as a gradual profit increase that starts at the breakeven line, and once the stock price crosses the short-put strike line it is well understood you are in the money. That is kind of a gray area the way I understand it.

Should I consider the short-put strike line as my ITM transition or should I consider the breakeven line as my ITM transition?

Damian Martin says:

I like Your video but damn homie you gotta start blinking your eyes I'm starting to think your a alien

evadesc says:

Question: is it not good to hold until expiration if you want to avoid assignment?

sir mandelino says:

thanks for the video! i have a question: i had a bear put spread position that ran into negative value this week. so buying the short leg to close it was more expensive than selling the long leg brought in. i thought this isn't possible and max loss is the premium paid, but it seems that this is not always true (in extreme conditions like oil last week). It was a CL Jun 15/13 Bear-Put Spread.

The Rollin Cat says:

Do I need to own the shares to do a put debit spread?

Rafe West says:

Do you have to hold till expiration or can you sell anytime you are in the green?And do you have to sell the vertical spread as a whole to be profitable?

marco landolsi says:

Great video 🙂

Agent Smith says:

Hi i have a question regarding assignment, what happens in the first example with the stock price of 135, buy 130 strike and sell 120 strike. What happens if the stock price gets to 115 itm one week before expiration, will i get early assignment if i don’t close the position? Ty this will help so much if anyone can answer me this question. Ty project option for these very informative videos.

Nils Decker says:

Thanks again! I asked it in your other video on the topic too, but why would you not execute the spread the moment it reaches its max profit potential? Isn't that just creating unnecessary risk (the stock might still tank, reducing the spread value) without any upside potential (max loss is pre-defined)?

R says:

Just subscribed….great tutorial. How do you like tastyworks compared to other platforms? I want more options analysis for my spreads than I currently can get on robinhood. Thank you

egoboy says:

I always buy way otm put when I’m bearish with a goal of profiting from extrinsic value alone. Since I don’t expect stock to ever go down to my strike ..adding a short put position at a lower strike is really free money.. right?

Moon Chung says:

Flawless video. Thank you for helping me understand this concept.

K Energy says:

Can I use the bear put spread to hedge a stock position instead a naked put? If the stock goes down reaching the short put or more I have to close the spread before expiration and buy another one if I think the stock goes down and so fort. If the spread is itm at expiration I have to sell it to collect the reward.?

Gwent Champ says:

Awesome vid man. Trying to master vertical spreads. Options hurt my brain, so many moving parts !

Comments are disabled for this post.