Definition
A bull put spread is an options position created by selling one put option and buying another put with a lower strike price and the same expiration. Because the put sold carries more premium than the put bought, the trade opens for a net credit.
The strategy expresses a moderately bullish or neutral view: the trader expects the underlying to stay above the higher strike, allowing both puts to expire worthless and the credit to be retained.
Why it matters
How it works
A trader sells a put near the current price and buys a put several points lower, collecting the premium difference. If the stock closes above the higher strike at expiration, both puts expire worthless and the full credit is profit. If the stock falls below the lower strike, the loss equals the strike width minus the credit. Between the strikes, the outcome scales linearly. The bull put spread is the bullish mirror of the bear call spread, and both belong to the credit-spread family used to generate income with capped risk.