Showing posts with the label selling-put-credit-spreads


THE OPTIONS COURSE BULL PUT SPREAD A bull put spread is a credit spread created by the purchase of a lower  strike put and the sale of a higher strike put using the same number of op tions and identical expirations. The maximum reward of this strategy is  limited to the credit received from the net premiums and occurs when the  market closes above the strike price of the short put option.  Therefore,  this strategy is implemented when you are bullish and expect the market  to close above the strike price of the put option sold.  The maximum profit of a bull put spread is limited to the net credit  received on the trade. The maximum risk is calculated by subtracting the  net credit from the difference in strikes and then multiplying this number  by 100. The breakeven of a bull put spread is calculated by subtracting  the net credit from the higher strike put. Choosing the Options In order to choose the options with the best probability of profitability for  a c