Bear Put Spread
Moderately bearish
Buy a put, sell a further OTM put against it: the bearish mirror of a bull call spread.
Payoff at expiry
Illustrative · NIFTY @ 25000Max Profit
₹4,279
Max Loss
₹3,221
Breakeven
24957
How it's built
Buy one ATM put and sell one put two strikes lower, same expiry, same lot. The short put funds part of the long put's premium.
When to deploy it
A moderate down move is your view, not a crash. You give up profit below the short strike in exchange for a materially cheaper entry than a naked put, with defined risk on both sides.
Worked example
Say NIFTY is trading around 25,000 with a few sessions left before expiry. You buy the 25000 put for ₹109, and you sell the 24900 put for ₹66 — a net debit of ₹3,221 for one lot of 75.
At expiry, the position is worth the most once NIFTY is on the right side of 24957 — up to ₹4,279 per lot. Move against that line instead and the worst case is capped at ₹3,221 per lot, not open-ended.
Mistakes that break this strategy
- Picking a short strike too far below spot, which barely lowers the premium paid.
- Ignoring that the short put still carries mark-to-market risk. It is not a free lower leg.
- Forgetting this caps gains exactly where a sharp crash would have paid the most on a naked put.
More bearish strategies
See it read live, not just diagrammed
DeltaK reads Aegis/Zenith wall migration and RRG rotation live across NIFTY, BANKNIFTY, FINNIFTY and MIDCPNIFTY. Sign in and watch it work in Paper mode.