Options Strategy
Bull Put Spread - Nifty 50
Sell a higher strike put and buy a lower strike put in the same expiry. You collect a net credit upfront. The full credit is yours to keep if Nifty stays above the sold put at expiry. Risk is defined and capped by the bought put below.
Leg 1 — SELL Put (higher strike)
24,000 PE
Receive premium: ₹340
Leg 2 — BUY Put (lower strike)
23,500 PE
Pay premium: ₹165
Net credit
₹13,125
Max profit (per lot)
Breakeven
23,825
Sold strike − net credit
Max loss
₹24,375
Spread width − net credit
Reward / Risk
0.5 : 1
Net credit ÷ max loss
Adjust your trade parameters
Above sold strike
Both puts expire worthless. Keep the full net credit collected.
At breakeven
Sold strike − net credit. The move down just erases your credit.
Between strikes
Partial loss as the sold put gains value against you.
Below bought strike
Max loss reached. Bought put caps any further downside.
Bull Put Spread vs Bull Call Spread: Both are bullish strategies with defined risk. The Bull Put Spread is a credit spread and you collect money upfront and profit from time decay if Nifty stays still or rises. The Bull Call Spread is a debit spread and you pay upfront and need Nifty to move up to profit. Use the Bull Put Spread when you expect Nifty to stay flat or drift higher.
How to execute on NSE
1
Identify a support level on Nifty below which you do not expect the market to fall. This becomes your sold strike region.
2
SELL the higher strike Put (e.g. 24,000 PE). This is your income leg you receive premium upfront.
3
BUY the lower strike Put (e.g. 23,500 PE) as protection. Net credit = Sell premium − Buy premium.
4
Place both legs as a spread order to avoid leg risk. Net credit hits your account immediately on execution.
5
Exit when 50–70% of the net credit has decayed. If Nifty breaks below the sold strike, exit the spread immediately to limit losses.
Key risks to know
Sold strike breach: If Nifty falls below the higher sold strike, the spread starts losing. The breakeven is not at the sold strike. It is below it by the net credit amount. Monitor closely.
Reward to risk is typically below 1: Credit spreads usually collect less than the max loss. The trade wins frequently in flat or bullish markets, but a single large loss can erase several winning trades.
Theta works for you: As the seller, every passing day benefits this position if Nifty stays above the sold strike. The closer to expiry, the faster the decay accelerates in your favour.
Assignment risk near expiry: If the sold put goes deep in the money near expiry, there is a small risk of early assignment on NSE. Monitor and close the spread before expiry if the sold put is ITM.