Bear Put Spread: A Controlled Way to Short the Market (以小博大做空)

1. Concept: What is a Bear Put Spread?

The Bear Put Spread (BPS), also known as a long put vertical spread or a put debit spread, is an options strategy employed when an investor anticipates a moderate decline in the price of the underlying asset.

It is structured by simultaneously taking two actions:

1. Buying (Long) one Put Option at a higher strike price (Strike A), typically At-the-Money (ATM) or slightly Out-of-the-Money (OTM).
2. Selling (Short) one Put Option at a lower strike price (Strike B), further OTM than the bought put.

Both options must have the same expiration date. Because the premium paid for the higher strike put exceeds the premium received for the lower strike put, the strategy results in a Net Debit (a cost to enter the position). This structure defines the maximum risk upfront.