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Strategy: Bull Put , (1 strike down to 1 strike up)

a.k.a. Bull Put Spread, Bull Put Vertical

Bull Put Option Graph

The Outlook: Bullish. The stock must rise by some amount to show a gain.

The Trade: buy Put 1 strike lower than current stock price, sell Put 1 strike higher than current stock price.

Gains when: stock rises.

Maximum Gain: initial credit.

Loses when: stock falls, or does not rise.

Maximum Loss : limited to difference in strike prices x number of shares represented - initial credit.

Breakeven Calculation: Short Put strike - initial credit.

Advantages compared to stock: limited risk, less capital needed, greater leverage.

Disadvantages compared to stock: gains are limited to the upside if stock rises more than the sold strike, no dividends.

Volatility: after entry, increasing implied volatility is positive if the stock falls, but negative if the stock rises.

Time: after entry, the passage of time is positive if the stock rises, but negative if the stock falls.

Margin Requirement: difference in strike prices x number of shares represented.

Variations: see the Vertical Spread Strategies page and the All Bull Put credit spread graphs page.

Synthetic Equivalent: Long Stock plus Long Put plus Short Call. (A "collar".)


  • This Bull Put can be used if you are bullish on a stock, but want to have a better chance of a gain than buying an ATM Long Call. The ATM Long Call must rise by the amount of the debit, this Bull Put has a gain with any rise in the stock price.
  • The gains are limited to the upside, so you don't want to be "too" bullish.
  • Over the range of strike prices used, the position will gain or lose a dollar amount nearly the same as holding a stock position.


  • Since this is a bullish position, the trader is expecting the stock to rise. If the stock falls instead, the trader would be wise to cut his losses short. Using the example graph, if the stock drops to about $47.50 at any time, the loss would be about $200, and it is probably best to take it. Just sitting and waiting could likely result in the maximum loss of more than twice that amount.
  • If the stock rises most of the way to the sold strike, the trader should stick with the position. As the option graph shows, just the passage of time is a benefit at any stock price near the sold strike.
  • If the stock rises over the strike you sold by expiration, both puts will expire worthless and you will not need to trade out of the position.


  • It is not usually recommended to adjust one part of a Bull Put. If you take a trading profit on the short puts when the stock rises for instance, you are actually increasing your maximum risk. You might think you will sell the puts again the next time the stock drops, but what if it doesn't?
  • It is possible to roll the entire bull put to lower strike prices if the stock drops, but that really amounts to closing one trade at a loss and opening another trade in hopes of a gain. Plus, the stock has not behaved bullishly yet you are taking a second bullish position.
  • If the stock rises to near the sold put strike with expiration near and you have made 80% or so of the total possible on the short puts, you can roll everything out to the next month, and higher strike prices, if you are still bullish on the stock.

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