Bear Put Spread

A Bear Put Spread is an options trading strategy used when you expect a stock’s price to decline. It involves buying a put option at a higher strike price and simultaneously selling a put option at a lower strike price. This limits both potential profit and loss. If the stock falls below the lower strike, the profit is capped, but you also set a maximum cost upfront. This strategy allows you to benefit from a moderate decrease in the stock’s price while managing risk and reducing the initial investment compared to just buying a put option alone.