Bear Put Spread: Moderately Bearish
Mirror image of Bull Call Spread. Used for downsizing.
The Setup
- Buy ATM Put (e.g., 22,000 PE).
- Sell OTM Put (e.g., 21,800 PE).
Logic
You pay for the ATM Put to profit from the fall.
You sell the OTM Put to finance that purchase.
Best Used: When market breaks a major support level but you expect it to hold the next support level (Target).
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