Bull Put Spread (put credit spread)

A bull put spread (put credit spread) sells an out-of-the-money put and buys a further-OTM put as a hedge. It is a defined-risk, bullish-to-neutral strategy: you collect a net credit and profit as long as the underlying stays above the short put through expiry.

Structure and payoff

Two legs on the put side:

• Sell OTM Put — collect premium (the short strike)
• Buy further-OTM Put — caps the downside loss

When to use it

Use it when you are mildly bullish or neutral and want defined risk. Max profit is the net credit (kept if the underlying expires above the short put); max loss is the strike gap minus the credit. It is one half of an Iron Condor.