Vertical spreads

Neutral to bullish

Credit

Risk: Defined both ways

Bull put spread

Also called: Credit put spread, Put credit spread

Sell a put and buy a lower-strike put on the same expiry: collect a credit that is kept above the short strike, with the loss capped by the bought put.

Payoff sketch (per unit, index points)

At expiry

Today (7 days left)

Net premium

Credit 61 pts

Max profit

+61 pts (₹3,995 per lot)

Max loss

−139 pts (₹9,005 per lot)

Breakeven

24,839

Legs: Sell PE ATM −100 · Buy PE ATM −300. Illustration, not live prices: an index at 25,000, strikes 100 points apart, Black-Scholes premiums at 13% implied volatility, 7 days to expiry, 6.5% interest, no skew and before charges. Rupees per lot use a NIFTY lot of 65.

How it works

It is a short put with insurance: the lower put caps the loss at the gap between the strikes, minus the credit received.

The trade-off is a smaller credit than the naked put, in exchange for a known worst case and a much smaller margin.

When traders use it

A view that the price will stay above the short strike, with a known maximum loss.
Selling put premium when the margin or the open-ended risk of a naked put is unacceptable.

Greeks

Delta	Positive.
Gamma	Negative near the short strike.
Theta	Positive while the price is above the short strike.
Vega	Negative, but smaller than a naked put's.

Profit, loss and margin

Max profit	The net credit less charges, when the underlying settles above the short (higher) strike.
Max loss	(Strike gap − net credit) × quantity, when it settles at or below the long (lower) strike.
Breakeven	Short strike − net credit.
Margin	Roughly the maximum loss: SPAN recognises the hedge once the long put is in.

In India

SPAN margins the whole position, so a defined-risk spread usually blocks far less than its short leg alone. Brokers grant the hedge benefit only when the protective leg is actually in the account, which is why the long leg is usually placed first.
STT is charged on the premium when an option is sold (0.15% of premium from 1 April 2026 in Arthfy's cost model). A short option left to expire, in or out of the money, is not charged STT again at settlement.
Since 20 November 2024 an extra 2% extreme-loss margin applies to short index options on their expiry day, so a position carried into expiry morning can need more margin than it did the day before.
Since 20 November 2024 each exchange keeps one weekly index expiry: NIFTY on NSE and SENSEX on BSE. Since September 2025 NSE contracts expire on Tuesdays and BSE contracts on Thursdays. BANKNIFTY, FINNIFTY, MIDCPNIFTY and stock options expire monthly (NSE on the last Tuesday). A holiday moves the expiry to the previous trading day.

Arthfy numbers

Bull put spread: what it did since 2016

Bull put spread, 30 delta, wing 2 strikes beyond, entered 8-15 days before expiry.

0-2 d

3-7 d

8-15 d

16-30 d

31-45 d

Try it in the F&O hub

Opens the tool with this structure on today's NIFTY chain. Reading is free with an Arthfy account; some runs use free attempts.

Open in the builderPayoff, Greeks, scenario grid and charges on today's NIFTY chain

Backtest since 2016Daily data, every NIFTY expiry

Replay on expiry daysMinute data since October 2024

Open the option chainLive premiums, IV and Greeks

Single options

Jade lizard

For education: how the structure works and what it did historically, not a recommendation to trade it.