Spreads2 legsdebitbearish

Buy a put and sell a further-out one below it. A defined-cost bearish position — the bull call's mirror, and a common way to hedge shares you hold.

You buy the put you want and sell a lower one to offset the cost. The debit is the total risk.

The mirror image of the bull call spread: a directional bet, paid for up front, with both the cost and the payoff bounded.

It is also a hedging structure. Held against 100 shares, a bear put spread defines a floor under the position for a known cost — cheaper than the put alone, in exchange for the floor only extending down to the short strike.

Priced off the guide's shared chain, on a $50 stock. Every figure beneath the diagram is computed from these legs by the same engine the Strategy Builder uses.

Flat at the maximum loss above the long strike — the debit paid.

Rising as the stock falls between the strikes, then flat at maximum profit below the short strike: the width less the debit.

One break-even, at the long strike minus the debit.

As a directional position it suits a bearish view with a target — the short strike says where you expect the fall to stop.

As a hedge over shares, it converts an open-ended downside into a defined one for a period, at a cost known in advance. That is a description of the mechanic, not a suggestion to hedge.

Like every debit structure, lower implied volatility makes it cheaper to establish.

Like everything in this guide, these are descriptions of structures and conditions — context for your own decisions, not instructions to trade.