Bull Put Credit Spread Calculator

A bull put credit spread sells a put and buys a lower-strike put on the same expiry. The trade brings in a credit, which is the maximum gain, and the long put caps the loss at the width of the strikes minus that credit. It profits if the stock stays above the short strike through expiry.

When it is used

This is a way to be paid for a view that a stock will not fall below a level, with the risk defined from the start. It is often sold after a decline has lifted implied volatility, with the short strike placed below a support level the trader expects to hold. It is also the put half of an iron condor.

How it makes and loses money

Time decay and falling implied volatility are the sources of profit, since the short put is worth more than the long one and loses value faster. A fall toward the short strike hurts, more so early in the trade when the puts still carry time value, and the loss is capped once the stock passes the long strike.

What to check in the grid

Look at the row at the short strike a few weeks before expiry. The position shows a loss there even though the stock has not broken the level, which is why these spreads are usually managed before the final days. The return on risk tile shows what the credit earns against the capital at risk.