A bull put spread sells a put and buys a cheaper put below it, for a net credit. You keep the credit if the stock stays above the short strike at expiration. Your loss is capped at the width of the strikes minus that credit.
The six bull put spread examples below are illustrative — round numbers, not trade recommendations — so the math is easy to follow. Each one shows the strikes, credit, max profit, max loss and break-even, and the one number most traders skip: the win rate the setup needs just to break even. After the examples: how to tag them in a journal so you find out which version actually pays you. Investopedia’s bull put spread entry is background.
Bull put spread math in four lines
Every example uses the same formulas. Option prices are per share; one contract covers 100 shares.
- Max profit = credit × 100
- Max loss = (strike width − credit) × 100
- Break-even price = short strike − credit
- Break-even win rate = max loss ÷ (max profit + max loss)
That last line matters. A spread that risks $350 to make $150 has to win 70% of the time before fees just to stay flat. If your journal shows a 65% win rate on that setup, it is losing money, however comfortable the wins feel.
1. Large-cap stock above a clear floor
The stock trades at $190. You sell the $180 put and buy the $175 put, about 30 days to expiration, for a $1.50 credit.
| Max profit | $150 |
| Max loss | $350 ($5 width − $1.50) |
| Break-even price | $178.50 |
| Break-even win rate | 70% |
This is the textbook version: short strike well under the current price, a month for time decay to work. The risk is a steady grind lower that never “breaks” anything until the short strike is in the money. Decide in advance where you close — for example, if the stock closes below $180 or the spread is worth twice the credit you took in.
2. Index ETF, shorter expiration
An index ETF trades at 500 (illustrative). You sell the 485 put and buy the 480 put, 21 days out, for a $1.00 credit.
| Max profit | $100 |
| Max loss | $400 |
| Break-even price | 484 |
| Break-even win rate | 80% |
Index spreads avoid single-stock earnings gaps, but the credit is thinner for the same distance, so the required win rate climbs to 80%. Weekly expirations push that further: more theta per day, but much faster price swings near expiration. If you trade both monthlies and weeklies, give them different tags; they behave like different strategies.
3. Same stock, wider strikes
Back to the $190 stock. This time you sell the $180 put and buy the $170 put for a $3.00 credit.
| Max profit | $300 |
| Max loss | $700 |
| Break-even price | $177 |
| Break-even win rate | 70% |
Widening the spread doubled both the credit and the risk. The return on risk (43%) and the break-even win rate (70%) did not change at all. Width changes the size of the trade, not its edge — so size it like any other position. The position size calculator works for spreads if you enter max loss as the risk per unit.
4. Earnings: selling the inflated premium
A $100 stock reports earnings next week, and option premiums are inflated. You sell the $90 put and buy the $85 put, expiring just after the report, for a $1.20 credit.
| Max profit | $120 |
| Max loss | $380 |
| Break-even price | $88.80 |
| Break-even win rate | 76% |
The idea is that implied volatility usually drops after the announcement, so the spread loses value quickly if the stock holds. The risk is a gap straight through both strikes overnight — there is no stop that helps you there. Log the market’s implied move next to your strike distance on every earnings spread; that comparison is what tells you, after 20 or 30 of them, whether you are being paid for the gap risk.
5. Low-volatility, dividend-paying stock
A $40 stock that rarely moves. You sell the $37 put and buy the $35 put, 45 days out, for a $0.40 credit.
| Max profit | $40 |
| Max loss | $160 |
| Break-even price | $36.60 |
| Break-even win rate | 80% |
Calm stocks pay small credits. The spread will win often, and one bad month can erase many of those wins. If the short put goes deep in the money, early assignment is possible; know what your broker does and whether you can hold the shares if assigned.
6. Short strike under a support level
A $250 stock has held $240 several times. You sell the $235 put — below support — and buy the $230 put for a $1.40 credit.
| Max profit | $140 |
| Max loss | $360 |
| Break-even price | $233.60 |
| Break-even win rate | 72% |
Support gives you a reason for the strike, and an obvious exit: if price closes below $240, the reason is gone. Write that rule before entry. Without it, this becomes example 1 with a story attached.
The six examples side by side
| Example | Credit | Max profit | Max loss | Break-even | Needs to win |
|---|---|---|---|---|---|
| 1. Large cap, 30 days | $1.50 | $150 | $350 | $178.50 | 70% |
| 2. Index ETF, 21 days | $1.00 | $100 | $400 | 484 | 80% |
| 3. Wider strikes | $3.00 | $300 | $700 | $177 | 70% |
| 4. Earnings | $1.20 | $120 | $380 | $88.80 | 76% |
| 5. Low volatility | $0.40 | $40 | $160 | $36.60 | 80% |
| 6. Under support | $1.40 | $140 | $360 | $233.60 | 72% |
None of these is “best.” They are different bets on time decay, volatility and distance. Which one pays you depends on how you pick strikes and manage exits — and that only shows up in your own results.
How to journal bull put spreads
Credit spreads feel like they win all the time, which is exactly why they need a journal. A 75% win rate can be a losing strategy if the losers are full-width.
Tag each version separately. BPS-SUP, BPS-IDX, BPS-EARN — not one “bull put” tag. Each has a different break-even win rate and a different way to fail. The general approach is in best trading strategies.
Log these fields on every spread:
- Underlying, days to expiration, strikes and width
- Credit received, max loss, break-even win rate
- Short strike delta or distance from price at entry
- Implied volatility (or IV rank) at entry
- Exit reason: profit target, stop, time exit, expiration, assignment
- Result in R, where 1R is the max loss
Review per tag after ~30 trades. Compare the actual win rate with the break-even win rate. Look at average loss as a fraction of max loss — if you keep holding to full width, your exit rule is not working. The options trading journal template has the columns; win rate and expectancy explains the math.
Managing a bull put spread
Three rules that are easy to write and easy to check later:
- Profit target. Many traders close at 50% of max profit instead of waiting for expiration, giving up the last bit of credit to remove the last weeks of risk.
- Loss exit. Close when the spread is worth a set multiple of the credit (for example 2×), or when the underlying closes below the short strike or your support level.
- Time exit. Close or roll before the final week if gamma risk near expiration is not part of the plan.
The numbers are yours to choose. What matters is that they are written down before entry and that the journal shows whether you followed them. More on exits in exit strategy planning.
Frequently Asked Questions
What is a bull put spread in simple terms?
You sell a put and buy a lower-strike put on the same stock and expiration, for a net credit. You profit if the stock stays above the short strike; your maximum loss is the strike width minus the credit.
How do you calculate the break-even of a bull put spread?
Short strike minus the net credit. Selling the $180 put and buying the $175 put for $1.50 gives a break-even of $178.50 at expiration.
What win rate does a bull put spread need?
Max loss divided by max profit plus max loss. Risking $350 to make $150 requires a 70% win rate before fees to break even. Your journal should show whether you clear that bar.
Is a bull put spread better than selling a naked put?
It caps the loss and needs far less margin, at the cost of a smaller credit. For most accounts, defined risk is the point.
When should you close a bull put spread early?
When your profit target is reached, when your loss rule triggers, or when the reason for the trade (such as a support level) is broken. Decide all three before entry.
Bottom line
These bull put spread examples all use the same four formulas, and the most useful one is the break-even win rate: it tells you how often a setup has to work before it pays. Tag each version separately, log the credit, max loss and exit reason, and compare your real win rate with the required one after a proper sample.
When you want those numbers calculated per tag instead of in a spreadsheet, open the journal and log your next spread.
Examples are illustrative, not recommendations. Options involve risk and are not suitable for all investors. This article is for education, not investment advice.