Bull put spread

Write a put, and buy a cheaper one below it with the same expiry. You collect the difference in premium, and the lower put puts a floor under how bad the loss can get. It is a bet that the stock stays above a level you choose — not that it rises.

A worked example

The stock is $100. You sell the $95 put for $2.20 and buy the $90 put for $1.00, both 30 days out. Net credit: $1.20 per share, or $120.

	Value	Where it comes from
Credit received	$120	($2.20 − $1.00) × 100
Maximum profit	$120	the credit, if both expire worthless
Maximum loss	$380	width $5 − credit $1.20, × 100
Break-even	$93.80	short strike $95 − credit $1.20

At expiry

Above $95 — both puts expire worthless. You keep $120. This is most of the time.
Between $93.80 and $95 — partial loss against the credit; you still end up ahead.
Below $90 — the full $380 loss. Below that the long put covers you, however far the stock falls.

The shape of the bet

Wins often, loses larger Risking $380 to make $120 means you need to be right roughly three quarters of the time simply to break even. A high win rate is not evidence the trade is good — it is the structure's design. What decides whether it is good is whether the credit is generous enough for the distance to the short strike, and that is a question about the price of volatility, not about how often it works.

This is why the Risk page shows the median and the tails rather than only the probability of profit: a strategy that wins 80% of the time and gives it all back in the 20% is indistinguishable from a good one until the 20% arrives.

Compared with writing the put alone

	Bull put spread	Naked put
Credit	$120	$220, larger
Worst case	$380, fixed	$9,280 — the stock to zero
Buying power	The width, $500	Far more, and it grows as the stock falls
If assigned	Both legs settle; the loss is capped	You own 100 shares at $95

The long put costs you $100 of the credit and removes an unbounded tail. It also stops a falling market from consuming your buying power at the worst moment — the mechanism that ends strategies early, because a margin call closes positions at the bottom regardless of whether the thesis was right.

Two risks the table does not show

Early assignment on the short leg

A written put that goes deep in the money can be exercised before expiry, leaving you holding shares while still owning the long put. The position is still defined-risk, but it now ties up real capital and is not the trade you opened.

Finishing between the strikes

Closing at exactly $95 leaves you unsure whether the short put will be exercised. The usual answer is to close the spread before expiry rather than find out.

The variant that is a different animal

A weekly written put sitting under a far-dated protective put looks similar and behaves differently. Held to expiry as a single structure it cannot win — the long leg costs more than one week's credit — and the dashboard correctly reports a negative maximum profit for it. The thesis is the repeated weekly writes against a standing hedge, and it carries a second decision the plain version does not: rolling the long leg before it stops protecting. See Income Rolls.

Seeing it in the dashboard

Candidates appear on Suggestions with their credit, risk and odds across the simulated paths. Hand one to Flight to hold it day by day — the useful part being the middle, where the stock dips under your short strike with two weeks left and the position is red but not yet decided.