Bear Put Ladder option strategy
The Bear Put Ladder is an extension to the Bear Put Spread. By selling another Put at a lower strike, the position is exposed to uncapped risk if the stock falls very fast.
Payoff at expiry
Nifty, lot size 65 · Nifty future 22,650 · 6 Oct 2026Legs
| Action | Option | Strike | Lots | Qty | Premium |
|---|---|---|---|---|---|
| BUY | ATM Put | 22,650 | 1 | 65 | ₹135.68 |
| SELL | OTM Put | 22,600 | 1 | 65 | ₹111.98 |
| SELL | OTM Put | 22,550 | 1 | 65 | ₹91.19 |
How it works
- Buy 1 ATM put at the 22,650 strike for ₹135.68, paying the premium.
- Sell 1 OTM put at the 22,600 strike for ₹111.98, collecting the premium.
- Sell 1 OTM put at the 22,550 strike for ₹91.19, collecting the premium.
- You receive a net ₹4,387 upfront for the position. Your maximum profit is ₹7,637.
Below 22,433 you lose, and the loss grows as Nifty falls.
Above 22,433 you profit, up to ₹7,637.
Set-up: Buy 1 lot ATM Put, Sell1 lot lower OTM Put, Sell 1 lot lower deep OTM Put ( All equal quantity).
What happens if Nifty moves
Profit or loss at expiry| Nifty at expiry | Move | Profit / loss |
|---|---|---|
| 21,300 | −6% | −₹73,613 |
| 21,950 | −3% | −₹31,363 |
| 22,400 | −1% | −₹2,113 |
| 22,650 | Unchanged | +₹4,387 |
| 22,900 | +1% | +₹4,387 |
| 23,350 | +3% | +₹4,387 |
| 24,000 | +6% | +₹4,387 |
How the Greeks affect it
When to use
Bear Put Ladder is to be executed when the trader is mildly bearish for the stock. Premium earned from selling two below strike puts helps to reduce initial outflow. Strategy is mildly bearish.
- Lower cost and better breakeven point compare to Bear Put Spread. Idle to participate in the stock where downside is limited. Faster time decay could be beneficial for the strategy.
Things to watch
- Uncapped downside if the stock falls.
- Strategy is ideally meant for advance trader due to risk exposed.
Bear Put Ladder: questions
What is a Bear Put Ladder strategy?
The Bear Put Ladder is an extension to the Bear Put Spread. By selling another Put at a lower strike, the position is exposed to uncapped risk if the stock falls very fast.
When should you use a Bear Put Ladder?
Bear Put Ladder is to be executed when the trader is mildly bearish for the stock. Premium earned from selling two below strike puts helps to reduce initial outflow. Strategy is mildly bearish.
How do you set up a Bear Put Ladder?
Buy 1 lot ATM Put, Sell1 lot lower OTM Put, Sell 1 lot lower deep OTM Put ( All equal quantity).
What is the maximum profit of a Bear Put Ladder?
Maximum Profit is limited between two OTM Puts. It is difference between higher strike and middle strike less net premium outflow.
What is the maximum loss of a Bear Put Ladder?
Strategy has two BEP points. Loss is limited to initial outflow if the stock closes above higher put strike. However loss is unlimited below lowest strike put.
What is the breakeven of a Bear Put Ladder?
With Nifty at 22,650, the example on this page breaks even at 22,433 at expiry.