What Is a Bull Put Spread?

A Bull Put Spread (also called a credit put spread) is a defined-risk version of selling a put. You sell a put at a higher strike and buy a protective put at a lower strike — same expiration, same stock. The difference in premiums is your income.

How It Works

Stock trades at $50. You sell the $47 put for $1.50 and buy the $44 put for $0.40. Your net credit: $1.10 per share ($110 per contract).

Three key numbers:

• Max profit: $110 (the net credit) — if stock stays above $47
• Max loss: $190 (spread width $3.00 minus credit $1.10, times 100) — if stock drops below $44
• Breakeven: $45.90 (short strike minus net credit)

Why Use a Spread Instead of a Naked Put?

The long put at $44 acts as insurance. Without it, your maximum loss on a $47 put is $4,700 (if the stock goes to zero). With the spread, your max loss is capped at $190. That's defined risk — you know the worst case before entering.

The tradeoff: You collect less premium ($1.10 instead of $1.50). But you tie up far less capital, and your broker requires less margin.

When It Works Best

• You're moderately bullish to neutral — you don't need a big move up
• You want defined risk with a known max loss
• You want to use less capital than a cash-secured put requires
• Implied volatility is elevated (richer credits)

The Relationship to Cash-Secured Puts

A Cash-Secured Put and a Bull Put Spread use the same core idea: sell a put, collect premium, profit if the stock stays above your strike. The spread just adds a safety net below.

ThetaLoop researches both strategies. The X-Ray scores apply to the underlying stock — regime, momentum, and volatility are relevant whether you sell a naked put or a spread.