DIZNR INTERNATIONAL

Option Strategy with live account – Bear put spread.

Diznr International
 Diznr International

Option Strategy with live account – Bear put spread.

https://www.gyanodhan.com/video/6B2.%20Stock%20Market/675.%20Option%20Strategy%20with%20live%20account%20-%20%20Bear%20put%20spread.mp4

Bear Put Spread: An Options Strategy for a Bearish Market

The Bear Put Spread is an options trading strategy used when a trader expects a moderate decline in the price of an underlying asset. This strategy involves buying a put option at a higher strike price and selling another put option at a lower strike price with the same expiration date.

 How Bear Put Spread Works

  1. Buy a Put Option (Higher Strike Price, Higher Premium)
  2. Sell a Put Option (Lower Strike Price, Lower Premium)
  3. Net Debit Strategy – Since you are paying more for the higher strike put than receiving for the lower strike put, this strategy requires an initial net debit (cost).

 Profit & Loss Calculation

 Example of a Bear Put Spread (Live Market Scenario)

Scenario:

Stock: Nifty 50 (Trading at ₹22,000)
Strategy: Bear Put Spread
Expiration: Next Monthly Expiry

Steps to Execute:

  1. Buy a 22,100 Put Option at ₹150
  2. Sell a 21,900 Put Option at ₹80
  3. Net Cost (Debit) = ₹150 – ₹80 = ₹70

Profit & Loss Outcomes:

Nifty Price at Expiry Buy 22,100 Put (₹150) Sell 21,900 Put (₹80) Net P/L
22,100+ ₹0 ₹0 -₹70 (Max Loss)
22,000 ₹100 ₹0 +₹30
21,900 ₹200 ₹100 +₹130 (Max Profit)
21,800 ₹300 ₹200 +₹130 (Max Profit)

 Key Advantages

Limited Risk – You know your maximum loss in advance.
Reduced Cost – Cheaper than buying a single put.
Good for Moderate Bearish Trends – You profit from moderate price declines.

 Disadvantages

Capped Profit Potential – Unlike a single put, your profit is limited.
Time Decay Effect – If the stock doesn’t move quickly, the trade can lose value over time.

 Live Trading & Monitoring with a Real Account

 Final Thoughts

The Bear Put Spread is a powerful options strategy for traders expecting a moderate market decline with limited risk and controlled profit potential. Would you like assistance in placing this trade on a specific platform?

Option Strategy with live account – Bear put spread.

Trading Downtrends Effectively with Bear Put Spreads

Option Strategy SBIN BEAR PUT RATIO SPREAD

Bear Put Spread

A Bear Put Spread is a popular options trading strategy used when you expect a moderate decline in the price of an asset. It’s a defined-risk, defined-reward strategy suitable for live trading accounts.

What is a Bear Put Spread?

A bear put spread involves:

  1. Buying a put option (higher strike) – This is the main bearish position.

  2. Selling a put option (lower strike) – This reduces the cost of the position and limits potential profit.

You pay a net debit (net premium) to enter the trade.

When to Use It:

Example (Live Market Style)

Assume:

You might:

Action Strike Price Option Premium (Example)
Buy Put ₹22,000 ₹220
Sell Put ₹21,800 ₹140

Net Debit (Cost) = ₹220 – ₹140 = ₹80 per lot
Max Profit = (₹22,000 – ₹21,800) – ₹80 = ₹120
Max Loss = ₹80 (the net premium paid)

Note: 1 Nifty option lot = 50 units
Max Loss in ₹ = 50 × 80 = ₹4,000
Max Profit in ₹ = 50 × 120 = ₹6,000

Payoff Chart

plaintext
Profit
|
Max Profit |--------
| \
| \
Breakeven --|----------\----------
| \
Max Loss | \___________
|
+---------------------------------->
Underlying Price

Advantages

Disadvantages

Risk Management (Live Account Tips)

How to Execute in a Live Trading Account (Zerodha, Upstox, AngelOne etc.)

  1. Go to options trading tab.

  2. Choose the same expiry for both puts.

  3. Place:

    • Buy order for higher strike put

    • Sell order for lower strike put

  4. Confirm net debit.

  5. Monitor daily using P&L charts.

Would you like a live mock setup with current market prices (e.g., from NSE or Zerodha) or a downloadable Excel calculator for bear put spreads?

option-strategies-quick-guide.pdf

Using a Bear Put Spread

Module 6_Option Strategies.pdf