Bear Put Spread strategy in Options trading Stock market #shorts #short #krinu

Bear Put Spread is a Bearish strategy where a trader thinks the Nifty will not go up , he thinks the Nifty will fall slightly or moderately .

in Bear put spread strategy the trader buys an In The Money (ITM) Put option and pays the premium to the seller ,Simultaneously he sells an Out of The Money (OTM) Put option and he receives the premium from the buyer

https://youtube.com/shorts/8QPCYiDmlfc

here in This example of Bear Put Spread the trader has paid a Premium of Rs.90 for the Leg-1 and had received a Premium of Rs.40 for Leg-2 contract so

90-40 = Rs.50 .is the total premium he had paid since the premium received will partially fund the premium he is gonna pay , hence his total Debit to construct this strategy is Rs.50 / share multiplied by the Lot size ( here for Nifty it is 50 / Lot)

so Now in Bear put spread strategy if the Nifty trades above the Break even of Leg-2 and Below the break even of Leg-1 , which implies that Nifty is moderately bearish so it does not fall below the leg-2 break even, and it should not be bullish or raise above the break even of Leg-1 .

https://youtube.com/shorts/B_v2XHRlIM0

to Implement Bear Put spread effectively the outlook for the market or Nifty should be moderately Bearish , it should not be Extremely Bearish or Bullish
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