Bull Put Spread Calculator
Sell a put and buy a lower-strike put with the same expiry, for a net credit. You profit if the stock stays above your short strike, and your loss is capped by the put you buy.
Stock
Put you're selling
Put you're buying
Calendar days to expiry: 30
Manual settings
Left blank, each is worked out from that put's premium (sold put left, bought put right).
Has only a small effect. Leave at 4% if unsure.
Example trade shown. Replace with your own numbers.
Profit / loss by stock price
Profit / loss over time
Values before expiry are estimates using Black-Scholes and each put's implied volatility. Chances use the sold put's volatility. Assumes both puts are held to each date shown and ignores closing fees, dividends and early assignment. For educational purposes only.
What is a Bull Put Spread?
A bull put spread is a way to earn income when you think a stock will stay above a certain price. You sell a put option and, at the same time, buy a put with a lower strike price and the same expiry date. You receive more for the put you sell than you pay for the one you buy, so you collect a net credit up front.
If the stock stays above the strike of the put you sold, both puts expire worthless and you keep the whole credit. The put you buy caps your risk: however far the stock falls, your loss can't be more than the gap between the strikes, minus the credit.
How to use this calculator
1. Enter the stock's current price. Adding the ticker symbol is optional.
2. Enter the put you're selling: its strike price (the higher one) and its premium per share.
3. Enter the put you're buying: its strike price (the lower one) and its premium per share.
4. Set the expiry date, or type the number of days to expiry.
5. Enter how many spreads you're trading and any fees per spread.
The calculator updates as you type. You'll see:
- Your net credit (your maximum profit), maximum loss and break-even price.
- Your return on risk, both for this trade and annualised.
- Your chance of making a profit, of keeping the full credit, and of taking the maximum loss.
- A chart of your profit or loss at different stock prices, today, at two dates in between, and at expiry. Hover over the chart (or tap it on a phone) to read exact values.
- A table of profit or loss by stock price and date, shown in dollars or as a percentage of your maximum loss.
You can find the premiums in your broker's option chain. Use the mid-price between the bid and the ask for a realistic figure. Under "Manual settings" you can enter the implied volatility yourself, change the interest rate, or set the price range shown in the chart and table.
When is a Bull Put Spread a good choice?
- You're neutral to bullish. You don't need the stock to rise, just to stay above your sold strike.
- The stock has held above a certain price before, and you can place your sold strike below that level.
- Implied volatility is higher than usual. Premiums are richer, so you collect a bigger credit for the same risk.
- You want a defined, limited risk. You know your worst case before you place the trade.
- You'd like a cash secured put style trade but with far less money tied up, because your loss is capped.
- You want time to work for you. As expiry gets closer, the spread loses value, which is good for you as the seller.
When might it not suit?
- The stock is in a strong downtrend, or you expect a big fall.
- There's a big event before expiry, such as an earnings report, that could cause a sharp drop.
- The credit is very small compared with the maximum loss. Check the return on risk and the chance of profit together.
Things to keep in mind
- Below the lower strike at expiry, you take your maximum loss.
- Between the two strikes, the result depends on where the stock finishes. Check the break-even price on the calculator.
- The put you sell can be assigned early if the stock falls well below its strike. Your bought put still protects you, but it's worth knowing.
- Many traders close the spread early once most of the credit is captured, rather than waiting for expiry.
This calculator gives estimates for educational purposes only. It isn't financial advice. Option prices before expiry are modelled, and real prices will differ.