Bearish Options Strategies
Learning how to make money in down markets is a critical component to your long-term success rate. The ability to profit when stocks are falling gives options traders a superior edge in the financial markets.
Lesson
2
of
12
Next Lesson
Lessons
Exit Course

Bear Put Spread

A bear put debit spread is a multi-leg, risk-defined, bearish strategy with limited profit potential. A bear put spread is entered when the buyer believes the underlying asset price will decline before the expiration date.
Bear Put Spread
Kirk Du Plessis
Apr 19, 2021

Bear put debit spreads are strategies that are designed to profit from a directional move lower in the underlying stock. Because you are a net buyer of options, they might also profit from increased implied volatility (though is not as likely). These are generally low probability trades that end up being 50-50 bets on the underlying direction. As a result, we do not trade these types of strategies often in our portfolio but will occasionally use them for rebalancing purposes.

Next lesson
Long Put
A long put is a bearish options strategy where the expectation is a decline in price prior to expiration. Buying a put option is a levered, risk-defined alternative to selling shares of stock.

Trade smarter with automation