Market View
Moderately Bearish
Implementation:
Buy a Put, and sell a lower strike cheaper Put to reduce premium
- Buy 1 ITM Put option (leg 1 - HS High Premium)
- Sell 1 OTM Put option (Leg2 - LS Low premium)
Key trigger points:
- Spread = Difference between the strikes
- Net Debit = Premium Received – Premium Paid
- Breakeven = Higher Strike – Net Debit
- Max Profit = Spread - Net Debit (at or below LS)
- Max Loss = Net Dredit (at or above HS)