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By Options AI Screener · Last updated 2026-10-12 · 7 min read
A bull put spread is what you get when you take a cash-secured put and buy a cheaper put below it. That single addition changes three things at once: it caps your loss, it cuts the capital required by most of its value, and it reduces what you collect. Understanding which of those matters to you is most of the decision.
Two legs, same underlying, same expiry:
The difference between the strikes is the width. The net of the two premiums is the credit, and it is yours on day one.
| Cash-secured put | Bull put spread | |
|---|---|---|
| Capital required | strike × 100 | (width − credit) × 100 |
| Max profit | premium collected | net credit |
| Max loss | strike − premium | width − credit |
| Can end with shares | yes | only if it is mishandled |
A $50 cash-secured put ties up $5,000. A 50/45 bull put spread ties up roughly $400. That capital difference is the main reason the structure exists.
Illustrative numbers, chosen to be round.
A stock trades at $54. You sell the $50 put for $1.30 and buy the $45 put for $0.45. Net credit: $0.85, so $85 per contract.
Three outcomes worth sitting with:
Capping the loss sounds strictly good. It is not free, and the cost shows up in the win rate you need.
Every defined-risk trade has a break-even win rate equal to max loss ÷ (max loss + max profit). For the spread above, that is 415 ÷ 500 = 83%. You need the stock to stay above $49.15 more than 83% of the time simply to break even.
Meanwhile the probability of profit on a spread like this often prints somewhere in the seventies. If the model says 76% and the arithmetic demands 83%, the trade has a negative expectation no matter how comfortable the 76% looks. That subtraction is the single most useful habit in credit trading and is worked through fully in what probability of profit measures and how far to trust it.
This is not an argument against spreads. It is an argument for doing the division before deciding, because the structures that feel safest tend to need the highest win rates.
The short strike sets almost everything: the credit, the probability, the cushion. Nearer the money pays more and is breached more often. Delta is the usual shorthand, and the 0.20 to 0.30 range is where most credit sellers operate — not because it is optimal, but because it balances premium against frequency in a way most people can hold through.
The long strike sets the cap. Closer to the short strike means cheaper insurance, smaller loss, and less credit. Further away means a bigger credit and a bigger hole.
Width is best understood as a sizing lever rather than a yield lever. Doubling the width roughly doubles both the credit and the risk, so return on risk moves little. What it does change is how much of your account one position represents, and that is the variable that actually decides outcomes over a year.
It fits when you want the directional exposure of a short put without committing the cash, when you have a defined view on a specific expiry, and when the strikes you want are liquid enough to exit without giving back the credit in spread cost.
It does not fit when a scheduled event sits inside the window — earnings reports widen the range of outcomes precisely where the structure is most exposed. It also does not fit when you would actually like to own the shares, because the long put removes that possibility. If assignment is the plan rather than the risk, you want the structure described in the wheel strategy walkthrough instead.
The number that matters is max loss, not credit. A spread collecting $85 against $415 of risk is not an $85 position. If a run of them going wrong would be a problem, the position is too large, and the time to notice that is before the credit is collected rather than after.
The Bull Put Spread screener shows credit, max loss, return on risk and probability together, so the two halves of the calculation stay beside each other. None of that is advice about a particular trade — the division above is still yours to do.
Both profit if the stock holds up. The spread adds a long put below your short strike, which caps the loss and cuts the capital requirement dramatically. In exchange you collect less premium, because the put you bought costs money. The cash-secured put can end with you owning shares; the spread cannot.
The width between the strikes, times 100, less the credit received. A $5-wide spread collecting $1.00 risks $400 per contract. That is the figure to size against, not the $100 credit.
If both strikes finish out of the money, the spread expires worthless and you keep the credit. If both finish in the money the loss is the full width less credit. The awkward case is the stock finishing between the strikes, where the short put is assigned and the long put is not, leaving you with shares. Most brokers close positions at risk of this, but it is the trader's responsibility.
Not inherently. A wider spread collects more credit and risks proportionally more, so the return on risk changes less than the headline numbers suggest. What width really changes is position size, and treating it as a yield choice rather than a sizing choice is how positions get too large.