Bear Put Spread – Defined Risk Downside Play

A Bear Put Spread is a bearish strategy where a Put option is bought and a lower strike Put is sold. This reduces cost, controls time decay impact, and keeps risk clearly defined. When to use: Use this strategy when the downside is expected to be limited to moderate, not a sharp breakdown. Historic Example: In the last week of December 2023,

was expected to trade below 2100 but stay above 2000 for the January 2024 expiry. • Buy 2100 Put @ ₹30 • Sell 2000 Put @ ₹12 Net premium paid = ₹18 Profit & Risk: Breakeven = 2100 − 18 = ₹2082 Max Profit = (2100 − 2000) − 18 = ₹82 Max Loss = ₹18 Key takeaway: Bear Put Spread is suitable for controlled bearish views where downside potential exists but risk discipline is essential. 📌 Disclaimer: This content is for information only and not investment advice. Investments in securities market are subject to market risks. Read all the related documents carefully before investing. Please consult a SEBI-registered advisor before making any investment decisions.