A strategy that buys a higher-strike put and sells a lower-strike put to profit from a moderate fall in the underlying.
A bear put spread is a limited-risk, limited-reward strategy built by buying a put option at a higher strike price and selling a put option at a lower strike price, both with the same expiry. The premium received from the short put offsets part of the cost of the long put, lowering the breakeven point compared to a plain put purchase, while capping the maximum possible profit. It suits traders expecting a moderate decline in the underlying rather than a sharp crash.
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