Bear Put Spread Calculator

What Is a Bear Put Spread?

A bear put spread, or put debit spread, is a strategy where you buy a put at a higher strike and sell a put at a lower strike, both with the same expiration date. This is a bearish strategy with limited risk and limited profit potential. You pay a debit at trade entry and profit if the stock falls below the strikes. It is one of the four vertical spread strategies. Learn more in our complete bear put spread guide.

Key Characteristics

• Max Profit: (Spread width − net debit) × 100 × number of contracts. Achieved when the stock closes at or below the short strike at expiration.
• Max Loss: Limited to the total debit paid at entry. Occurs when the stock closes at or above the long strike at expiration—both options expire worthless.
• Breakeven: Long strike − net debit
• Outlook: Moderately bearish

How to Read the P/L Chart

The cyan line (T+0) shows your theoretical P/L at trade entry. Before expiration, the curve is smoother because both options still have time value. As a debit spread buyer, time decay works against you when the stock is above the breakeven.

T+0 means "today plus 0 days," while T+30 would mean "today plus 30 days." It's a common convention for payoff diagrams that show multiple points in time.

The white line (Expiration) shows your profit or loss at expiration. If the stock is above the long strike, you lose the full debit paid. Between the strikes, your profit increases as the stock falls. Below the short strike, your profit is capped because the short put offsets the long put 1-for-1.

The relationship between the T+0 and Expiration P/L lines helps you visualize time decay. When T+0 is below the expiration line, the position has positive theta—you make money as time passes. When T+0 is above the expiration line, you have negative theta—you lose money as time passes.

Try hovering over the P/L chart at various stock prices and compare the T+0 and Expiration P/L values.

Using This Calculator

Enter the following trade details:

1. Stock Price: The price of the stock at trade entry.
2. Long Strike: The higher strike where you buy the put.
3. Short Strike: The lower strike where you sell the put (further OTM).
4. LP/SP Prices: If calculating with prices, enter the prices you pay/receive for the long put (LP) and short put (SP). The long put price will always be higher.
5. Days to Expiration: Time remaining until both options expire.
6. Implied Volatility: If calculating with IV, enter the implied volatility for both puts. Implied volatility is the market's expectation of future price movement, as implied by the stock's options.
7. Dividend Yield: The stock's annual dividend yield.
8. Risk-Free Rate: The current risk-free interest rate.
9. Quantity: Number of spreads.

Bear Put Spread vs Long Put

A long put has massive profit potential if the stock plummets, but costs more than a bear put spread with the same long strike. A bear put spread costs less, has a higher breakeven, and gives you a higher chance of profit, but your gains are capped. If you expect the stock to collapse, a long put offers a bigger payout. If you expect a moderate move lower, the spread offers better risk/reward.

In most scenarios, the put debit spread will outperform a naked long put because of the cheaper cost/higher breakeven price.

If you buy a 90 put for $5 and the stock is $80 at expiration, you double your money. But if you buy a 90/80 put spread for $3 and the stock is $80 at expiration, you more than triple your money on the same move. The naked put purchase would only outperform with a much larger decline.

Bear Put Spread vs Bear Call Spread

Both are bearish strategies, but they differ in construction.

A bear put spread is a long put with a lower-strike short put. You pay a debit at entry and profit when the stock falls through the strikes. Bear put spreads are typically set up with an ITM long put and OTM short put, resulting in less exposure to time decay—and sometimes even positive theta.

A bear call spread is a short call with a higher-strike long call. It collects a credit at entry and is typically OTM, resulting in positive theta. The credit for an OTM call spread will be small, resulting in more risk than profit potential (but with a high probability of profit).

A bear put spread with an ITM/OTM setup will have roughly equal risk/reward. As the strikes are moved lower (like buying an ATM put and shorting an OTM put), the risk/reward improves, but with a lower probability of profit.

A Note on Early Assignment

The short put can be assigned early if it's ITM. This is most likely when the short put is deep ITM with little extrinsic value.

If the short put is only slightly ITM with plenty of time until expiration (7+ days), it will have significant extrinsic value and early assignment is unlikely. The best way to gauge early assignment risk is to monitor the extrinsic value in the short put—the closer it is to zero, the higher the likelihood of early assignment.

When trading a put debit spread, getting assigned early on the short put means your spread is deep ITM, which means you're at max profit. Early assignment here wouldn't be a bad thing, it would just change your position structure and might force you to close the rest of the trade.

Assignment at Expiration

Getting assigned by holding ITM options through expiration is different. If only your long put expires ITM, you'll end up with short stock. Your risk profile changes from limited upside risk to theoretically unlimited upside risk.

If both puts expire ITM, they offset, and you end up with no stock position. So if only your long put is ITM going into expiration, it's good to close it to avoid ending up with naked short stock on the next trading day.

Related Calculators

• Long Put Calculator — Unlimited profit potential
• Bear Call Spread Calculator — Credit spread alternative
• Bull Put Spread Calculator — Bullish counterpart
• All Vertical Spread Calculators — Bullish and bearish spreads