Bull Put Spread

A bull put spread is a defined-risk credit spread with a bullish bias. Sell a put closer to the money, buy a further-OTM put as protection. You collect a net credit, and the trade wins as long as the stock doesn’t fall meaningfully below your short strike. It’s the income trader’s favorite directional vehicle: high probability, defined risk, and you don’t need the stock to actually go up to win.

The structure

Two puts on the same expiration. Sell the closer-to-the-money put, buy a further OTM put as defined-risk protection. The long leg is what makes this trade defined-risk vs. a cash-secured put — your max loss is the spread width minus the net credit, regardless of how far the stock falls.

Worked example

AAPL is at $180. You think it stays above $170 over the next 35 days. The 35 DTE 170/165 bull put spread:

• Sell 170 put at $1.80
• Buy 165 put at $0.80
• Net credit: $1.00 ($100 per spread)
• Max profit: $100 (the credit)
• Max loss: $5 spread − $1 credit = $4 ($400 per spread)
• Breakeven: $170 − $1 = $169
• POP (delta-implied): ~75%
• R:R: 0.25 (1 unit of reward per 4 units of risk)
• Annualized return on max loss: ~26%

At expiration: AAPL above $170 → keep the full $100; AAPL between $169-$170 → partial credit; AAPL below $165 → take the full $400 loss.

Why traders love this trade

The bull put spread sits in the sweet spot for income trading. It has:

• High probability of profit. 70-80% on typical defaults. Most setups win.
• Defined risk. Unlike a CSP, the most you can lose per contract is fixed and known up front, so you can size correctly without setting aside 100×strike in cash.
• Capital efficient. You only need the max loss as collateral, not the full strike price. The same capital that supports one CSP can support 5-10 bull put spreads.
• Forgiving. The stock can go up, sideways, or even down a little — you still win. You only lose on a meaningful drop.

The catch: bad R:R

The trade-off for high POP is bad risk:reward. You’re risking $4 to make $1. One full loss eats the gains from four winners. This is fine if your win rate is actually ~80%, but it’s brutal if you misjudge a few setups.

How Tradient ranks them

The bull put scanner walks every OTM put in your DTE window, groups by expiration, pairs each short candidate with a long candidate at the configured spread width, validates the net credit (default min $0.30), and ranks by POP. The Tradient Score then reranks by composite quality, which usually keeps the high-POP setups on top because POP carries 45% of the score weight.

Managing the trade

Take profits at 50%

Same rule as iron condors and CSPs. Buy back the spread when you can do so for half the credit collected. The last 50% of theta takes much longer than the first 50% and exposes you to gamma risk near expiration.

Defending a tested short

If the stock breaches your short strike with weeks left, you have three options: roll down and out (close the current spread, reopen at a lower strike further-dated for net credit if possible), close at a partial loss, or take the full max loss. Don’t add to the position — the original sizing was the right size.

Common mistakes

• Selling too tight a credit.A $0.10 credit on a $5 wide spread isn’t worth the friction. Set a minimum credit floor that justifies the trade after fees.
• Selling on names with binary risk. Earnings, FDA decisions, court rulings. The whole “high POP” thesis assumes a roughly normal distribution. Binary events break that assumption.
• Sizing by credit instead of by max loss. Always size by what you could lose, not by what you collect. Tradient’s capital sizing does this automatically — don’t override it.

Where to go next

• Bear Call Spread — the bearish twin.
• Iron Condor — combine a bull put spread with a bear call spread for neutral exposure.
• Cash-Secured Put — the undefined-risk version with the same bullish-neutral thesis.