Options Strategy
Bear Put Spread - Nifty 50
Buy a higher strike put and sell a lower strike put in the same expiry. The premium received from the short put reduces your net cost and caps your maximum profit at the lower strike. A defined-risk bearish strategy.
Leg 1 — BUY
24,000 PE
Pay premium: ₹380
Leg 2 — SELL
23,500 PE
Receive premium: ₹175
Net debit
₹15,375
Max loss (per lot)
Breakeven
23,795
Higher strike − net debit
Max profit
₹22,125
Capped at lower strike
Reward / Risk
1.4 : 1
Max profit ÷ max loss
Adjust your trade parameters
Below lower strike
Max profit locked in. Short put caps any further gain below here.
Between strikes
Profit grows point by point as Nifty falls below breakeven.
At breakeven
Higher strike − net debit. The spread just covers its cost.
Above higher strike
Both options expire worthless. Lose net debit — your full risk.
Bear Put Spread vs Long Put: A plain Long Put on the 24,000 strike costs ₹380 pts with high downside potential. The spread costs only ₹205 pts net 46% cheaper but profit is capped at the 23,500 strike. Use the spread when you expect a moderate fall, not a market crash.
How to execute on NSE
1
Open the Nifty 50 options chain and select the same expiry for both legs weekly or monthly.
2
BUY the higher strike Put (e.g. 24,000 PE). This is your directional bearish leg.
3
SELL the lower strike Put (e.g. 23,500 PE). Net debit = Buy premium − Sell premium.
4
Place both legs as a spread order in your broker's platform to avoid leg risk, one leg executing without the other.
5
Exit both legs together before expiry if your target is hit, or hold to expiry for automatic cash settlement.
Key risks to know
Capped downside profit: If Nifty crashes well below the lower strike, you gain nothing extra. A plain Long Put would outperform in a severe sell-off.
Time decay (Theta): Works slightly in your favour the short put loses value faster near expiry but the net position still bleeds if Nifty stays flat or rises slightly.
Strike width matters: Wider spread = higher max profit but higher net debit. Narrower spread = cheaper but less room to earn. Match the width to your Nifty downside target.
Direction risk: If Nifty rallies instead of falling, both puts expire worthless and the full net debit is lost. The loss is defined but still real.