How is a Bear Put Spread breakeven calculated?
At expiration, the breakeven is the higher (long) put strike minus the net premium paid for the spread. Below this level, the position begins to profit.
A Bear Put Spread buys one put at a higher strike and sells one put at a lower strike with the same expiration. This creates a defined-risk, defined-reward position with lower cost than buying a put alone.
Calculate This StrategyAt expiration, the breakeven is the higher (long) put strike minus the net premium paid for the spread. Below this level, the position begins to profit.
Maximum profit occurs when both puts are in-the-money at expiration. It equals the difference between strikes minus the net premium paid, multiplied by the contract count.
Explore similar approaches and alternatives to find the best fit for your market outlook.
Similar market outlook or risk profile
Bearish
A Long Put buys one put option and gives the holder the right to sell shares at the selected strike before expiration. It is a defined-risk position that can benefit when the underlying price falls.
Bullish with downside protection
A Protective Put combines long shares with a purchased put option. The stock retains upside participation, while the put can establish a lower exit value at the selected strike before expiration.
Different ways to achieve similar or opposite goals
Moderately bullish
A Bull Call Spread buys one call at a lower strike and sells one call at a higher strike with the same expiration. Both risk and profit potential are defined at entry, and the net cost is lower than buying a call outright.
Bullish to neutral
A Covered Call combines long shares with a short call option. The stock position participates in downside movement, while the short call premium can provide income and caps upside above the call strike.
Easier strategies with fewer legs
Bearish
A Long Put buys one put option and gives the holder the right to sell shares at the selected strike before expiration. It is a defined-risk position that can benefit when the underlying price falls.
Neutral (range-bound)
An Iron Condor combines a bull put spread and a bear call spread. It profits when the underlying stays within a defined range between the short strikes, collecting premium from all four options.
Neutral with low volatility
A Butterfly Spread uses three strikes: buy one option at a lower strike, sell two options at a middle strike, and buy one option at a higher strike. It profits when the underlying stays near the middle strike at expiration.
Educational use only. Options involve risk and this calculator does not provide investment advice or guarantee an outcome.