Bull Put Spread option strategy
Bull Put Spread is a bullish income strategy that could be executed when one expects the underlying to find support and inch higher.
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 | ₹135.67 |
| SELL | ITM Put | 22,700 | 1 | 65 | ₹162.30 |
How it works
- Buy 1 ATM put at the 22,650 strike for ₹135.67, paying the premium.
- Sell 1 ITM put at the 22,700 strike for ₹162.30, collecting the premium.
- You receive a net ₹1,731 upfront for the position. This is the most you can make.
Below 22,673 you lose, up to ₹1,519.
Above 22,673 you profit, up to ₹1,731.
Set-up: Buy 1 lot ATM Put and Sell 1 lot 1 Deep ITM Put.
What happens if Nifty moves
Profit or loss at expiry| Nifty at expiry | Move | Profit / loss |
|---|---|---|
| 21,300 | −6% | −₹1,519 |
| 21,950 | −3% | −₹1,519 |
| 22,400 | −1% | −₹1,519 |
| 22,650 | Unchanged | −₹1,519 |
| 22,900 | +1% | +₹1,731 |
| 23,350 | +3% | +₹1,731 |
| 24,000 | +6% | +₹1,731 |
How the Greeks affect it
When to use
Bull Put spread is executed when we have bullish outlook in Stock/ Index. Lower strike put outflow is funded by higher strike in the money Put. It is a net credit strategy.
- Helps to generate sustain income if the view goes correct.
- Can be used to repair loss making Long Put by selling higher ITM put.
- Develop Limited risk, limited reward strategy.
Things to watch
- Identifying clear area of support and resistance is essential.
- If the stock closes below lower strike put, one can lose money.
Bull Put Spread: questions
What is a Bull Put Spread strategy?
Bull Put Spread is a bullish income strategy that could be executed when one expects the underlying to find support and inch higher.
When should you use a Bull Put Spread?
Bull Put spread is executed when we have bullish outlook in Stock/ Index. Lower strike put outflow is funded by higher strike in the money Put. It is a net credit strategy.
How do you set up a Bull Put Spread?
Buy 1 lot ATM Put and Sell 1 lot 1 Deep ITM Put.
What is the maximum profit of a Bull Put Spread?
Maximum reward is limited to difference between two strikes i.e. net capital inflow. Maximum Profit arises if the stock closes at or above the higher strike put resulting in both the strike ending worthless and you pocket entire initial inflow.
What is the maximum loss of a Bull Put Spread?
Maximum risk is difference between both the strikes less credit inflow received initially. Maximum loss arises when stock closes below lower strike put.
What is the breakeven of a Bull Put Spread?
With Nifty at 22,650, the example on this page breaks even at 22,673 at expiry.