Bear put spread explained: buy a put, sell a lower strike, and cap both risk and reward. AMZN example with break-even, Greeks, and exit rules.
Summary: A bear put spread means buying one put and selling another put with a lower strike and the same expiration. The put you sell pays for part of the put you buy, so the position costs less and has a closer break-even than a long put alone. In exchange, your gain is capped at the difference between the strikes minus what you paid. Both the maximum loss and the maximum gain are known before you enter. It suits a moderately bearish view, usually with 30–60 days to expiration.
Last updated: 2026-10-16.
What Is a Bear Put Spread?
A bear put spread is a two-leg options position: you buy a put at a higher strike and sell a put at a lower strike, both on the same stock and with the same expiration. Because the put you buy costs more than the put you sell, it's a debit spread — you pay a net amount up front, and that amount is the most you can lose.
The position gains when the stock falls. Below the lower strike, the two puts offset each other, so your gain stops growing. That cap is what makes the entry cheaper. A long put keeps gaining all the way down to zero; a bear put spread aims at a specific level: "I think this stock drops to about here, and I'm not paying for anything below that."
This sounds more complicated than a single put, but here's the simple version: you're buying a put and lowering its cost by giving up the gains below a price you don't expect the stock to reach anyway.
The Insurance Coverage Limit Analogy
Think of insuring something you own. A policy that pays for every possible loss, however large, is expensive. A policy that pays up to a set limit — say, the first $20,000 of damage — costs much less, because the insurer no longer covers the extreme cases. If the damage stays within the limit, the cheaper policy pays just as well.
A bear put spread works the same way. The put you buy is your coverage against a decline; the put you sell sets the coverage limit. The analogy has one honest catch: insurance protects something you own, while a bear put spread is a standalone position — if the stock doesn't fall, the whole premium is simply gone.
Key Facts
- A bear put spread buys one put and sells one lower-strike put with the same expiration; the net cost is the maximum loss.
- Maximum gain = (strike width − net debit) × 100: in this example ($20 − $7.04) × 100 = $1,296 per spread.
- Break-even at expiration = higher strike − net debit: $250 − $7.04 = $242.96 here.
- In the illustrative AMZN example, the spread costs $704, versus $987 for the $250 put alone — 29% less.
- The spread needs a 2.8% drop to break even at expiration; the long put alone needs a 3.9% drop.
- Net vega is smaller: a 3-point drop in implied volatility costs the spread about $36, versus about $104 for the long put alone.
- Amazon pays no dividend, so ex-dividend dates don't affect this trade.
How a Bear Put Spread Is Constructed
The setup has two legs, opened together:
- Buy one put at or near the money — this is the leg that gains when the stock falls.
- Sell one put at a lower strike, same expiration — this leg pays you a premium and caps your gain.
The two legs of the spread: the sold put pays for part of the bought put.
The formulas:
Net debit = premium paid − premium receivedMax loss = net debit × 100 (stock at or above the higher strike at expiration)Max gain = (higher strike − lower strike − net debit) × 100 (stock at or below the lower strike)Break-even at expiration = higher strike − net debit
The put you sell is "covered" by the put you own: if the stock collapses, the long put gains what the short put loses. That's why the risk stays defined, and why many brokers allow debit spreads at a lower options approval level than naked short puts. See margin and buying power for options for how brokers treat spreads.
Bear Put Spread Example: AMZN
Amazon (AMZN) traded around $251 in mid-October 2026, according to the AMZN quote on StockAnalysis. The example below uses an illustrative scenario with AMZN at $250. The numbers are for learning the mechanics, not a recommendation to trade AMZN.
Check the calendar first. Amazon has scheduled its third-quarter 2026 results for October 29, 2026. A 45-day spread opened before then would carry the report, and the stock could gap in either direction. This example assumes you open the spread right after the report, once implied volatility has settled. It uses an implied volatility of 30% and a 4% interest rate. Amazon doesn't pay a dividend.
You're moderately bearish: you think AMZN could slide toward $230 over the next six weeks, but you don't expect a collapse. You open this spread:
| Parameter | Value |
|---|
| Stock price (illustrative) | $250 |
| Buy | 1 AMZN $250 put (at the money) for $9.87 |
| Sell | 1 AMZN $230 put (out of the money) for $2.83 |
| Days to expiration | 45 |
| Implied volatility (assumed) | 30% |
| Net debit (max loss) | $7.04 per share = $704 per spread |
| Max gain | $12.96 per share = $1,296 per spread |
| Break-even at expiration | $242.96 (2.8% below $250) |
| Reward-to-risk | 1.84 : 1 |
For comparison, buying the $250 put alone would cost $987, with a break-even of $240.13 — AMZN would need to fall 3.9% just to break even at expiration, versus 2.8% for the spread.
{{LIVE_DATA:bear_put_spread:AMZN}}
The live widget above shows current AMZN data, which will differ from the fixed numbers in this example. Use the example for the logic, then apply the same formulas to live prices.
Bear Put Spread Payoff Diagram
The payoff diagram shows your result at expiration. Above $250, both puts expire worthless and you lose the $704 debit. Between $250 and $230, every $1 AMZN falls adds $100. Below $230, the gain is fixed at $1,296, no matter how far AMZN drops.
Bear put spread payoff at expiration: the loss is capped at the $704 debit and the gain at $1,296.
Here's how the spread compares with the long put at different expiration prices:
| AMZN at expiration | Bear put spread | $250 long put alone |
|---|
| $270 | −$704 (−100%) | −$987 (−100%) |
| $250 (flat) | −$704 (−100%) | −$987 (−100%) |
| $245 | −$204 (−29%) | −$487 (−49%) |
| $240 | +$296 (+42%) | +$13 (+1%) |
| $235 | +$796 (+113%) | +$513 (+52%) |
| $230 | +$1,296 (+184%) | +$1,013 (+103%) |
| $200 | +$1,296 (+184%) | +$4,013 (+407%) |
The table shows the real trade-off. In a moderate decline to $240 or $230, the spread does better, because it cost less. Only in a deep drop — below about $227.17, where both make $1,296 — does the long put pull ahead. And if AMZN goes nowhere or rises, both lose everything they paid, but the spread loses $704 instead of $987.
Long put vs bear put spread: lower cost and a closer break-even, in exchange for a capped gain.
Under the pricing model used here, there's about a 40% chance that AMZN finishes below the spread's break-even, versus about 35% for the long put's break-even. These are model estimates under the assumed 30% volatility, not forecasts — but they show why a closer break-even matters.
How the Greeks Affect a Bear Put Spread
Because the two legs partly cancel, the spread's Greeks are smaller than a single put's. The table shows the net values per share; the right-hand column translates them into dollars per spread. (Background in the option Greeks explained.)
| Greek | Net spread value (per share) | What it means for you |
|---|
| Delta (Δ) | −0.27 | You gain about $27 per $1 AMZN falls — versus about $46 for the long put alone |
| Gamma (Γ) | +0.005 | Small at entry: the short put's gamma offsets most of the long put's |
| Theta (Θ) | −0.029 | Time decay costs about $2.94 per day, versus about $10.25 for the long put alone |
| Vega (ν) | +0.113 | A 1-point change in implied volatility moves the spread about $11.30, versus about $34.85 for the long put |
Smaller Greeks cut both ways. The spread bleeds more slowly if AMZN stands still and cares less about volatility — a 3-point IV drop costs it about $36, while the long put loses about $104. But it also moves more slowly. Even if AMZN falls to about $233 and stays there, the spread shows only about half its maximum gain (about $648) with 14 days left.
Theta also changes sign as the stock moves. With 24 days left and AMZN at $250, the spread loses about $6.73 a day. With AMZN at $230, it gains about $6.94 a day, because the short put is now decaying faster than the long put. Once AMZN is near or below the short strike, time passing works for you. For more on how volatility drives option prices, see implied volatility explained.
Choosing the Strikes and Width
The distance between the strikes — the width — sets the balance between cost, break-even, and reward. Here's the same AMZN setup with a $250 long put and three different short strikes:
| Spread | Net debit | Max gain | Break-even | Reward : risk |
|---|
| $250 / $240 ($10 wide) | $424 | $576 | $245.76 | 1.36 : 1 |
| $250 / $230 ($20 wide) | $704 | $1,296 | $242.96 | 1.84 : 1 |
| $250 / $220 ($30 wide) | $865 | $2,135 | $241.35 | 2.47 : 1 |
A narrow spread is cheaper and has a closer break-even, but caps your gain sooner. A wide spread offers more reward for each dollar at risk, but needs a bigger drop — and starts to look like a plain long put. A practical rule: put the short strike where you realistically expect the stock to be by expiration — a level like recent support or the bottom of the expected move — not where you fear it could go.
When to Use a Bear Put Spread
- You're moderately bearish, with a target. You expect a decline, but not a crash, and you can name a level the stock is likely to reach.
- Implied volatility is moderate. When IV is middling, a single put isn't cheap, and selling the lower put takes some of the volatility premium off your cost.
- You want a smaller, defined commitment. In this example, $704 instead of $987, for the same $100 per $1 gain between $250 and $230 at expiration.
- You have 30–60 days for the move. Enough time for the thesis to work, while time decay on the net position stays moderate.
When NOT to Use a Bear Put Spread
- When you expect a crash. If you think AMZN could fall to $200, the cap costs you most of the move. A long put fits better.
- When implied volatility is very low. Single puts are already cheap, and selling the lower put brings in little.
- Right before earnings you haven't planned for. A gap up above the long strike can take the whole debit overnight.
- When you're hedging shares you own against a crash. A capped spread protects only down to the lower strike. Protection below that needs a different structure.
Bear Put Spread Entry Criteria and Exit Rules
When to open a bear put spread and how to manage it.
Entry Criteria: When to Open a Bear Put Spread
- Moderately bearish view with a realistic price target.
- Medium implied volatility: an IV rank roughly between 30% and 50%, so today's IV is neither cheap nor extreme compared with its own past-year range.
- 30–60 days to expiration.
- Long put at the money (delta roughly −0.45 to −0.50), short put near your target.
- Reward larger than risk: max gain above the net debit.
- Earnings date checked before you enter.
Exit Rules: Managing a Bear Put Spread
- Take gains at 50–75% of the maximum. 50% of $1,296 means closing when the spread is worth about $13.52 (a gain of about $648); 75% means about $16.76 (about $972). In the example, AMZN at about $233 with 14 days left puts the spread at that 50% mark.
- Close if AMZN rises above the long strike and stays there. If AMZN climbs to $260 with 30 days left, the spread is worth about $3.70 — a loss of about $334 (47% of the debit). Closing then keeps about half of what you paid.
- Close by 14 days to expiration if neither target nor stop has triggered. If AMZN is still at $250, the spread is worth about $5.20, a loss of about $184. From there, the outcome depends almost entirely on where AMZN lands on the last day.
- Close both legs together. Closing the long put alone leaves a naked short put, which can force you to buy 100 shares at $230.
💡 Pro Tip: In a real brokerage account, the short put can be assigned early when it's deep in the money and has almost no time value left. Your long put still covers the loss, but you'd briefly hold 100 shares until you exercise or sell. If AMZN falls well below $230 before expiration, closing the spread early avoids the hassle. See what happens at options expiration for how assignment works.
Common Bear Put Spread Mistakes
- Setting the short strike by fear, not by target. A wide spread whose short strike sits 12% below the stock price is closer to a long put than to a defined bearish target.
- Expecting the maximum gain early. Before expiration, the short put still has time value, so the spread trades below its $2,000 width — and your gain stays under $1,296 — even when AMZN is under $230.
- Legging in and out. Opening or closing one leg at a time exposes you to price moves between the two orders.
- Ignoring transaction costs. Two legs mean two sets of commissions and two bid-ask spreads at a real broker, which matters more on narrow spreads.
- Holding through expiration with the stock between the strikes. An in-the-money long put is typically auto-exercised while the short put expires, leaving you short 100 shares after expiration.
⚠️ Warning: A bear put spread limits your loss to the debit, but that loss is 100% of what you paid. If AMZN finishes at or above $250, the full $704 is gone. Size each spread as if that will happen.
How to Practice Bear Put Spreads Without Real Money
Pilots practice approaches in a simulator until the checklist is second nature. Bearish spreads reward the same discipline: the hard part isn't opening the two legs, it's taking gains at your target when the stock is falling fast and you're tempted to hold for more.
In the simulator, the "Strategies" tab has a Bear Put Spread template that shows the required capital, maximum profit and loss, break-even, and Greeks before you trade, and opens both legs with one "Execute strategy" click. Generate charts in the Random scenario, where some paths fall and some don't, and practice your exit rules on each one. Then try the Bull Market scenario to rehearse the hardest part — closing a losing bearish spread when the stock keeps rising. Each run is a synthetic chart that has never existed, so you're practicing decisions, not memorizing history.
FAQ
What is a bear put spread?
A bear put spread is an options strategy where you buy a put and sell a lower-strike put with the same expiration. The sold put lowers the cost of the bought put. Your maximum loss is the net amount paid, and your maximum gain is the difference between the strikes minus that amount.
How do you calculate the break-even of a bear put spread?
Subtract the net debit from the higher strike. In the AMZN example, $250 − $7.04 = $242.96. Below that price at expiration, the spread shows a gain; above it, a loss, up to the full $704 at or above $250.
Is a bear put spread better than buying a put?
Neither is better in every case. The spread costs less and has a closer break-even — $242.96 versus $240.13 in the example — so it does better in moderate declines. The long put does better in a deep drop, because its gain keeps growing below the lower strike.
When should you close a bear put spread?
Common rules are to take gains at 50–75% of the maximum, close if the stock rises above the long strike and stays there, and close by about 14 days to expiration. Always close both legs together to avoid a naked short put.
What happens to a bear put spread at expiration?
If the stock is below the lower strike, both puts are in the money and offset each other, giving the maximum gain. If it's above the higher strike, both expire worthless and you lose the debit. If it's between the strikes, the long put is in the money and the short put expires worthless, so close the spread before expiration to avoid a short stock position.
Related: Long Put Strategy, Option Greeks Explained, Implied Volatility Explained, Margin and Buying Power, Options Expiration Guide.
About the author: Miroslav Slavkovský is the founder of OptionsSimulator and a software developer focused on derivatives-pricing models. He built the platform's simulation engine — implementing Heston, SABR, GARCH, and Monte Carlo methods — so traders can practise options strategies on generated market scenarios rather than on historical charts.
Practice Bear Put Spreads on a Synthetic Chart
Want to test whether you'd really take gains at your target when a stock is sliding — without risking real money? Open the simulator, set up a bear put spread from the Strategies tab, and manage it with the rules above on a synthetic chart that has never existed.
Open Simulator
Frequently asked questions
What is a bear put spread?
A bear put spread is an options strategy where you buy a put and sell a lower-strike put with the same expiration. The sold put lowers the cost of the bought put. Your maximum loss is the net amount paid, and your maximum gain is the difference between the strikes minus that amount.
How do you calculate the break-even of a bear put spread?
Subtract the net debit from the higher strike. In the AMZN example, $250 − $7.04 = $242.96. Below that price at expiration, the spread shows a gain; above it, a loss, up to the full $704 at or above $250.
Is a bear put spread better than buying a put?
Neither is better in every case. The spread costs less and has a closer break-even — $242.96 versus $240.13 in the example — so it does better in moderate declines. The long put does better in a deep drop, because its gain keeps growing below the lower strike.
When should you close a bear put spread?
Common rules are to take gains at 50–75% of the maximum, close if the stock rises above the long strike and stays there, and close by about 14 days to expiration. Always close both legs together to avoid a naked short put.
What happens to a bear put spread at expiration?
If the stock is below the lower strike, both puts are in the money and offset each other, giving the maximum gain. If it's above the higher strike, both expire worthless and you lose the debit. If it's between the strikes, the long put is in the money and the short put expires worthless, so close the spread before expiration to avoid a short stock position.