EXAMPLE
Bull put credit spread
Illustrative example
- Underlying
- $100.00
- Entry credit before fees
- $120
- Breakeven
- $93.81
- Max profit
- $118.7
- Max loss
- -$381.3
- Expires
- 2026-10-16
Premium strategy tool
Bull Put Credit Spread Screener
A bull put credit spread sells a put at a higher strike and buys a put at a lower strike in the same expiration. You receive a net credit and profit if the stock stays above the short strike.
The long put defines the maximum loss, which makes capital at risk visible before you trade.
Product preview
The chart below is the same payoff component used inside the platform, run on the hypothetical example described later on this page.
Bull put credit spread
Sell a put and buy a lower put: a credit now, with loss limited to the spread width minus the credit.
Illustrative example
- Sell$95 put
- Buy$90 put
Profit zoneLoss zoneStock priceBreakeven
- Example stock
- $100.00
- Entry credit before fees
- $120
- Breakeven
- $93.81
- Max profit
- $118.7
- Max loss
- -$381.3
- Evaluated at
- Expiration
Includes $0.65 entry commission per option contract. Exit, exercise/assignment fees and taxes are excluded.
Payoff scenario
Illustrative example, read-only. Hypothetical inputs run through TradingSignalAI's payoff model.
Illustrative example
- Hypothetical underlying
- $100.00
- Entry credit before fees
- $120 ($1.20/share)
- Position · standard 100-share contracts
- Sell $95 put · buy $90 put
Expiration payoff
1 structure · 100 shares per option leg · expires 2026-10-16
Hover, touch, or focus the chart and use arrow keys to read P/L at a price.
- Shaded above $0: profit
- Shaded below $0: loss
- Solid line: P/L at expiration
- Dashed line: reference price
- Circle: break-even
- Dotted line: strike (values below)
- Break-even
- $93.81
- Strikes
- $90.00, $95.00
- Payoff profit cap
- $118.7
- Max loss
- $381.3
The chart shows underlying prices from $78.00 to $112.00 only. Losses or gains outside this window can be larger; the window's lowest and highest points are not maximum risk.
Includes $0.65 entry commission per option contract. Exit, exercise/assignment fees and taxes are excluded.
Move the pointer or focus the chart and use the left and right arrow keys to read profit or loss at each stock price. These are not live quotes or signals.
Metrics in pictures
Implied volatility: the range the market prices in
Example: $100 stock, 30 days to expiration. One-standard-deviation move = stock x IV x sqrt(days / 365).
Illustrative example
- Lower IV 20%+/- $5.73
Smaller expected range, lower premium for the same strike and expiration.
- Typical IV 30%+/- $8.6
A middle reading for this example.
- Higher IV 50%+/- $14.33
Wider expected range and larger premium, with more risk of a large move.
Bars span the one-standard-deviation range around the stock price. Not a forecast. IV rank in the product uses a realized-volatility proxy, not a historical implied-volatility rank.
Delta: directional exposure
Select a delta to see what it means for one call contract.
Illustrative example
Out of the money, delta 0.30
Moderate sensitivity. Sold options here collect more premium than at 0.15 and are more likely to finish in the money.
One standard contract has about 30 shares of price exposure: roughly $30.00 per small $1 stock move, or $0.30 per quoted share, with other inputs held constant.
Delta is a model sensitivity, not a probability forecast. Values shown are examples, not quotes.
How the bull put credit spreads tool works
- The finder builds put pairs in the same expiration with a defined strike width.
- Pairs are screened for liquidity and credit relative to width.
- Results show credit, breakeven, maximum profit, maximum loss and return on risk.
- The payoff chart plots expiration P/L, including a $0.65 entry commission per leg.
Metrics you will see
| Metric | Meaning |
|---|---|
| Net credit | Short put bid minus long put ask. |
| Maximum profit | Net credit times 100. |
| Maximum loss | (Width - credit) x 100. |
| Breakeven | Short strike minus net credit. |
| Return on risk | Maximum profit divided by maximum loss. |
Worked example
Hypothetical example for a stock trading at $100. Not a quote, a recommendation or a result. Sell the $95 put and buy the $90 put for a $1.20 credit.
| Item | Calculation |
|---|---|
| Maximum profit | $1.20 x 100 = $120 if the stock closes at or above $95 |
| Maximum loss | ($5.00 - $1.20) x 100 = $380 at or below $90 |
| Breakeven | $95 - $1.20 = $93.80 |
| Return on risk | $120 / $380 = 31.6% |
Chart figures differ by cents because they include $1.30 of entry commissions. Figures shown here are before fees.
Risks to understand
- The maximum loss is defined but can be much larger than the credit. A maximum loss that is several times the maximum profit is common.
- The short put can be assigned early, creating a stock position before the long put is exercised.
- A wide bid-ask spread on two legs can erase a thin credit.
- Pin risk around the short strike near expiration needs active attention.
Access
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Eligible new customers can begin a 7-day Premium trial. A payment method is required, and the selected plan bills automatically at the end of the trial unless canceled. Registration alone is not a Premium subscription.
Frequently asked questions
Learn more
- Options Assignment: Share Delivery & RiskUnderstand exercise, early assignment, share delivery and expiration risk. Learn why covered positions and defined-risk spreads still need active review.
- Options Premium: Quotes, Spreads & ExecutionLearn how option premium is quoted per share, how contract size changes cash amounts, and why bid, ask, midpoint and fill prices are different.
- Options Delta: Sensitivity, Not a GuaranteeLearn what delta measures, how call and put deltas differ, and why a delta-based probability estimate is not a guaranteed assignment or profit forecast.
- Options Expiration, DTE & Return ComparisonsUnderstand days to expiration, exercise and assignment timing, and why normalized or annualized returns are comparisons rather than income promises.
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Research the trade before you place it
Create a free account to record holdings and cash and browse universe research. Premium adds the strategy tools. Eligible new customers can start a 7-day Premium trial; a payment method is required and the plan bills automatically unless canceled. Registration alone is not a Premium subscription.