Bull Put Spread Calculator
A bull put spread is a vertical credit spread: you sell a higher-strike put and buy a lower-strike put. You collect a net credit and profit if the stock stays above the short strike.
Price it
Practical example
When to use it
- Your bet is 'the stock will NOT be below my short strike at expiration' — that's a weaker claim than 'the stock will go up'
- Implied volatility is elevated (high IV rank) — credit spreads are short vega and monetize IV contraction
- You want positive theta and a high probability of profit, accepting that max loss > max profit
- You want defined risk relative to a naked short put (the long wing caps catastrophic moves)
Risks
- Max loss (width − credit) is larger than max profit (credit) — one loser can erase several winners if not managed
- Drawdown shows up fast on a selloff: short puts gain vega and delta aggressively as the stock approaches the short strike
- Early assignment is possible if the short put goes deep ITM, especially just before a dividend
- IV expansion hurts the position before expiration even if the stock holds — you need either price to hold OR IV to contract
The deeper breakdown
How a Bull Put Spread Works
Sell a put at strike A and buy a put at strike B (B < A), same expiration. You receive a net credit. If the stock is above strike A at expiration, both puts expire worthless and you keep the credit. If price breaks below the short strike, losses accumulate until capped by the long put at strike B.
Example
AAPL at $195. Sell the $195 put for $3.40, buy the $190 put for $2.00. Net credit: $1.40 ($140). Max loss = ($5 − $1.40) × 100 = $360.
The Real Bet
A bull put spread is not really a directional bullish trade — it's a probability trade that the underlying will stay above a specific level. It makes money in flat, mildly up, and even mildly down tape, as long as price stays above the short strike. The "bull" label refers to the payoff slope, not your required conviction.
Greek Profile
Management
Most systematic sellers target 30–45 DTE at entry and close at 50% of max profit rather than holding to expiration. Holding through expiration exposes you to max gamma in the final week for minimal remaining credit.
Key Takeaway
Bull put spreads harvest theta and short-vega in elevated-IV, range-bound-to-rising tape. Max loss exceeds max profit; the edge has to come from high POP and disciplined management, not from winning every trade.
Calculations are theoretical projections from standard pricing models (Black-Scholes), not predictions. Real fills, slippage, dividends, and volatility shifts will cause outcomes to differ. Not investment advice. Full disclaimer.