BULL PUT SPREAD | bull strategy

Example: Sell 1 put; buy 1 put at lower strike with same expiry
Market Outlook: Neutral to bullish
Risk: Limited
Reward: Limited
Increase in Volatility: Typically hurts position slightly
Time Erosion: Helps position
Break-Even Point (BEP): Short put strike minus credit received

The bull put spread option trading strategy is employed when the options trader thinks that the price of the underlying asset will go up moderately in the near term. The bull put spread options strategy is also known as the bull put credit spread as a credit is received upon entering the trade.

Bull put spreads can be implemented by selling a higher striking in-the-money put option and buying a lower striking out-of-the-money put option on the same underlying stock with the same expiration date.

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