Bull Put Spread Definition Thursday, November 1, 2:49 PM ET
A bull put spread in an investment strategy in which an investor purchases a put option, while selling short another put option at a higher strike price for the same underlying security. The risk when placing a bull put spread is if the share price decreases beyond the sold put and if the share price decreases below the bought put. A profit is made when the price of the underlying stock remains above the higher strike price, resulting in the option that was sold short expiring worthless. The total This strategy is best utilized when a moderate increase in price of the underlying asset is expected.
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