The exact mirror of the bull call spread. Bearish view with defined risk and reduced cost. Deep dive: bear call credit variant, follow-up recipes, four-vertical-spread matrix.
📖 14 min read🇮🇳 Nifty
The idea
Expect Nifty to fall to 24,700 by Tuesday. Buying naked put costs ₹200. Instead:
Buy the 25,000 put
Sell a 24,700 put (offset premium)
Smaller net cost, capped upside at target, better risk/reward.
Bear put spread — profit capped at lower strike, loss capped at debitProfitLoss
At Spot (25,000)
₹-75
Strikes
25,000 / 24,500
Mirror of the bull call spread. Above the higher strike: max loss = debit paid. Below the lower strike: max profit = spread width − debit.
What would this have done on real Nifty?
Detailed worked example
Example
Nifty 25,000 / 24,700 bear put spread
Nifty at ₹25,000. Expect drop to 24,700 by Tuesday.
Buy 1 × 25,000 PUT at ₹200 → cost ₹13,000 (200 × 65)
Sell 1 × 24,700 PUT at ₹80 → collect ₹5,200 (80 × 65)
Net debit: ₹7,800
Bear put spread payoffProfitLoss
At Spot (25,000)
₹-7,800
Strikes
25,000 / 24,700
Max profit ₹11,700 (Nifty ≤ 24,700), max loss ₹7,800 (Nifty ≥ 25,000), break-even 24,880, R/R 1 : 1.5 — favorable.
Formulas
Bear put spread math
Net debit = Long put − Short put premium
Max profit = (Long − Short strike) × Lot − Debit × Lot
Max loss = Total debit
Break-even = Long strike − Debit per share
When to use / not
Use: moderate bearish view with target, high IV, defined risk preferred, alternative to shorting.
Skip: crash-expectation (naked put better), very short expiry, underlying already dropped.
Choosing strikes
Long put: ATM or slight ITM (0.5-1% ITM)
Short put: at your downside target
Width: 1-3% (Nifty 200-500 points)
Vs naked long put
Long put
Bear put spread
Cost
₹15,000
₹9,000
Break-even
24,800
24,880
Max profit
Large (unbounded)
₹13,500
Max loss
₹15,000
₹9,000
Save 40% cost, closer BE, cap max profit at spread width.
Bear CALL spread — credit version
AdvancedBear call spread — same view, opposite structure
Same bearish view built with calls, as CREDIT spread.
Structure
Sell OTM call (collect)
Buy further-OTM call (protection)
Net credit upfront
Example
Nifty at 25,000, bearish.
Sell 25,300 CALL at ₹75 → +₹5,625
Buy 25,500 CALL at ₹30 → −₹2,250
Net credit: ₹3,375
Max profit ₹2,925 (below 25,300). Max loss (200 − 45) × 65 = ₹10,075 (above 25,500). Break-even 25,345. R/R 3.4:1 against.
Debit vs Credit — pick by IV
Low IV (< 30): Bear PUT spread (buy cheap premium)
High IV (> 60): Bear CALL spread (sell rich premium)
Mid: Either
Full four-vertical matrix
Bullish
Bearish
Debit
Bull CALL
Bear PUT ✓
Credit
Bull PUT
Bear CALL
Any directional view expressible with defined risk, IV-optimized.
Follow-up action
AdvancedBear put spread adjustment recipes
Scenario 1: Broke below short strike early (max profit region)
Close and take profit — recommended.
Convert to butterfly by selling further-OTM put — locks profit + room.
Hold to expiry — only for tiny positions.
Scenario 2: Sideways in middle
Close, salvage residual value.
Hold to expiry — theta helps modestly.
Scenario 3: Rallied against you
Cut losses at 50% of debit.
Let expire — loss capped.
Roll to next expiry (rarely worth it).
50-75% and 21-DTE rules
Close at 50-75% max profit
Close/roll monthly spreads at 21-DTE regardless of P&L
Position sizing
Formula
Max risk = Account × 2%
Max lots = Max risk ÷ (Debit × Lot)