Max profit
$311.28
Bear put spread calculator
Pays a debit for a capped profit if the price falls. Enter your strikes and price to see the maximum profit, maximum loss, breakeven, profit chance and expected value.
Leave the price empty to estimate it from implied volatility. Results are per contract (100 shares), held to expiration.
Estimated debit: $188.72 per contract (from implied volatility; type your real price above)
Max loss
−$188.72
Breakeven
$98.11
Profit chance ?
40.9%
Expected value ?
−$16.67
Reward to risk
1.65 to 1
Get the full verdict on this trade
Free, no account. The app adds volatility skew, exit plans, position sizing and a plain-English verdict.
How to use the bear put spread calculator
- Enter the stock's price, the days left until expiration and the implied volatility from your option chain.
- Enter each strike. Then type the price you'd pay per share, or leave it empty for an estimate.
- Add the stock's realized volatility to see expected value: what the trade makes on average if the stock keeps moving the way it has been.
Worked example
Say a stock trades at $100, options price in 25% implied volatility, and the stock has really been moving about 20% a year (its realized volatility). With 30 days to expiration, a bear put spread at strikes 95 / 100 costs about $1.89 per share, or $188.72 per contract.
- Max profit: $311.28
- Max loss: $188.72
- Breakeven: $98.11
- Profit chance, market-implied: 40.9%
- Expected value with 20% realized volatility: −$16.67 per contract
The expected value is negative here because the stock is assumed to move less than options price in (20% vs 25%), so the options are expensive relative to the likely move. If the stock moves more than implied, the same trade can come out ahead on average. That gap between implied and realized volatility is what the full app checks first.
What is a bear put spread?
A bear put spread buys a put and sells a lower-strike put, paying a net debit.
How it makes or loses money
It gains as the price falls, down to the short put. Selling the lower put reduces the cost but caps the gain.
When traders use it
Traders often use it when they expect a moderate decline with defined risk.
Profit and loss at expiration
- Max profit: strike width minus the debit
- Max loss: the debit paid
- Breakeven: long put strike minus the debit
The Greeks
| Greek | Sign |
|---|---|
| Delta | − |
| Theta | − to + |
| Vega | small |
| Gamma | small |
What to watch out for
- A slow or small decline may not overcome time decay.
- Profit is capped at the short strike.
Questions
What is the max profit on a bear put spread?
Strike width minus the debit. In the example above that's $311.28 per contract.
What is the max loss on a bear put spread?
The debit paid. In the example above that's $188.72 per contract.
How do you calculate the breakeven of a bear put spread?
Long put strike minus the debit. The calculator works it out from your strikes and price.
What does "profit chance" mean here?
It's the market-implied chance that the trade finishes with any profit at expiration, if the stock moves as much as implied volatility prices in. It assumes you hold to expiration and uses one volatility for every strike. A high profit chance doesn't mean a good trade: small, frequent wins can still lose money overall if the losses are large.
What's the difference between implied and realized volatility?
Implied volatility is how much movement option prices assume. Realized volatility is how much the stock has actually been moving. Option sellers tend to come out ahead on average when realized stays below implied, and buyers when it runs above. Expected value in this calculator uses the realized volatility you enter.
Is a bear put spread a good trade?
This calculator can't tell you that, and neither can anyone who doesn't know your account, goals and risk tolerance. It shows the math for the numbers you enter. Whether those numbers hold up depends on the price you actually get, how the stock moves and how you manage the trade.