Bull Put Spread Calculator

Bull Put Spread at a glance

How a bull put spread works

The short put collects the premium and does most of the work. The long put, further out of the money, costs less and acts as protection, turning the large downside of a short put into a defined loss. Brokers typically require margin equal to the width between the strikes minus the credit, which makes the trade far more capital efficient than a cash secured put. You do not need the stock to rise, only to stay above the short strike.

At expiration the payoff has three zones. Above the short strike both puts expire worthless and you keep the full credit. Between the strikes, the short put gains intrinsic value against you and profit falls one for one. Below the long strike both puts are in the money and their changes offset, so the loss is flat at its maximum: the width between the strikes minus the credit. The breakeven is the short strike minus the credit.

Time decay works in your favor from day one, since you sold the more valuable option. The position also benefits when implied volatility falls, which is why traders often sell put spreads after volatility has risen. As the stock falls toward the short strike, negative gamma speeds up the losses, and the rise in volatility that usually comes with a selloff adds to them. Much of the credit decays in the final weeks, which the calculator's P/L table makes easy to see.

Bull Put Spread example with real numbers

With the stock at $100, implied volatility at 30%, a 4.1% risk free rate and no dividend, you would sell 1 97.5 put (32 days) at $2.27, buy 1 92.5 put (32 days) at $0.84. That is a net credit of $143. At expiration a maximum profit of $143 and a maximum loss of $357, with a breakeven at $96.07. The lognormal chance of profit is 67%.

These are theoretical American option prices from the Bjerksund and Stensland model, not live quotes. Load any ticker in the bull put spread calculator above to run the same math on real market prices.

When to use a bull put spread

• You are neutral to bullish and expect the stock to hold above a support level through expiration.
• Implied volatility is elevated and you want to sell premium with defined risk.
• You want a smaller capital commitment than a cash secured put or naked put requires.
• You prefer a trade that can profit from time passing even if the stock goes nowhere.

Max profit, max loss and breakeven

Maximum profit

Net credit received times 100. You keep all of it if the stock closes at or above the short, higher strike at expiration.

Maximum loss

Higher strike minus lower strike minus net credit, times 100. This occurs if the stock closes at or below the long, lower strike at expiration.

Breakeven

Higher strike minus net credit per share. Below this price at expiration the spread loses money.

Bull Put Spread Greeks

• Delta: Delta is positive, so the spread gains as the stock rises. It is largest with the stock between the strikes.
• Gamma: Gamma is negative near the short strike, so losses accelerate as the stock falls toward it. Below the long strike, gamma fades.
• Theta: Theta is positive while the stock is above the short strike, and it grows as expiration nears.
• Vega: Vega is negative at entry. Rising implied volatility increases the spread's value and hurts you, while falling volatility helps.

See the live numbers for your position in the Greeks tab of the calculator, or explore a single option in the options Greeks calculator.

Early exercise and assignment risk

Early assignment risk sits on the short put. If the stock falls through the short strike and the put goes deep in the money, its holder may exercise early, and you buy 100 shares per contract at the higher strike. Your long put still caps the damage: exercise it to sell the shares at the lower strike, which realizes the spread's defined maximum loss, or sell the shares and the put separately if that nets more. The practical issue is buying power, since your account must carry the shares until you act.

Put assignment tends to come right after an ex dividend date rather than before, because put holders benefit from the stock's dividend drop. Interest rates matter too, since higher rates make early exercise of deep in the money puts more attractive. At expiration, pin risk appears when the stock closes near the short strike: you may be assigned while your long put expires worthless, leaving you long unhedged shares over a weekend. Closing the spread in the final session removes that risk.

The calculator's Early exercise risk tab flags short legs that are likely to be assigned. For a single option, use the early exercise calculator or read how early exercise and assignment work.

Pros and cons

How to manage a bull put spread

• Take profits early, once a large share of the credit has decayed, rather than holding into expiration week.
• Set a loss limit in advance, either a multiple of the credit or a stock price below the short strike.
• Roll down and out for a net credit if the stock tests the short strike and your outlook is unchanged.
• Close the spread when the short put is deep in the money with little time value to limit assignment.

Bull Put Spread FAQ

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Educational tool, not financial advice. Calculations are theoretical and depend on your inputs; real fills, fees, early assignment and dividends can change results. Options involve risk and are not suitable for every investor.