Basics

Optionist.net
Mentoring
DE | ENG

Basics

Bull & Bear Spreads

Four important vertical spreads with clear direction, capped risk, and simple numerical examples.

Overview

Credit or debit, bullish or bearish

Bull Put and Bear Call are credit spreads with premium received upfront. Bull Call and Bear Put are debit spreads with premium paid upfront.

All four variants use the same underlying, the same expiration, and two different strikes.

Credit Bull Put Spread

Bullish to slightly neutral. Sell the higher put and buy the lower put.

  • Example Stock 100, short put 95, long put 90, credit 1.20 USD.
  • Break-even 93.80 USD.
  • Max gain 120 USD, Max loss 380 USD.

Bull Put Spread

Bull Put SpreadThe line shows the result along the labelled price axis. Assumptions and legs are listed below.P/L per share (USD)-602859095100105Underlying at expiry (USD)
Credit: 1.20 USDMax. gain: 120 USDMax. loss: 380 USDBE: 93.8 USD
  • Long Put 90
  • Short Put 95
Result at the common expiry, including assumed net premium, excluding fees. P/L per share or option point; multiply by 100 for a standard contract with multiplier 100. White dots = break-even; dashed lines = strikes.
Credit Bear Call Spread

Bearish to neutral. Sell the call closer to spot and buy the higher call.

  • Example Stock 100, short call 105, long call 110, credit 1.10 USD.
  • Break-even 106.10 USD.
  • Max gain 110 USD, Max loss 390 USD.

Bear Call Spread

Bear Call SpreadThe line shows the result along the labelled price axis. Assumptions and legs are listed below.P/L per share (USD)-60295100105110115Underlying at expiry (USD)
Credit: 1.10 USDMax. gain: 110 USDMax. loss: 390 USDBE: 106.1 USD
  • Short Call 105
  • Long Call 110
Result at the common expiry, including assumed net premium, excluding fees. P/L per share or option point; multiply by 100 for a standard contract with multiplier 100. White dots = break-even; dashed lines = strikes.
Debit Bear Put Spread

Bearish. Buy the put closer to spot and sell the lower put.

  • Example Stock 100, long put 100, short put 95, debit 1.80 USD.
  • Break-even 98.20 USD.
  • Max gain 320 USD, Max loss 180 USD.

Bear Put Spread

Bear Put SpreadThe line shows the result along the labelled price axis. Assumptions and legs are listed below.P/L per share (USD)-4049095100105110Underlying at expiry (USD)
Debit: 1.80 USDMax. gain: 320 USDMax. loss: 180 USDBE: 98.2 USD
  • Long Put 100
  • Short Put 95
Result at the common expiry, including assumed net premium, excluding fees. P/L per share or option point; multiply by 100 for a standard contract with multiplier 100. White dots = break-even; dashed lines = strikes.
Debit Bull Call Spread

Bullish. Buy the call closer to spot and sell the higher call.

  • Example Stock 100, long call 100, short call 105, debit 1.90 USD.
  • Break-even 101.90 USD.
  • Max gain 310 USD, Max loss 190 USD.

Bull Call Spread

Bull Call SpreadThe line shows the result along the labelled price axis. Assumptions and legs are listed below.P/L per share (USD)-4049095100105110Underlying at expiry (USD)
Debit: 1.90 USDMax. gain: 310 USDMax. loss: 190 USDBE: 101.9 USD
  • Long Call 100
  • Short Call 105
Result at the common expiry, including assumed net premium, excluding fees. P/L per share or option point; multiply by 100 for a standard contract with multiplier 100. White dots = break-even; dashed lines = strikes.