Bull Put Spread Risk Calculation

A bull put spread, also known as a put credit spread or short put spread, is a defined risk option strategy. The position’s spread width, minus the credit received, defines the maximum loss.

For example, if you sell a $5 wide bull put spread for a net credit of $0.92, the most you can lose on the position is $408 per contract if the underlying price is below the long put strike at expiration.