Bull Put Spread: An Excellent Way to Profit From Time Decay

The bull put spread is a two-legged options strategy used by traders when they believe that the market is moderately bullish. This strategy is identical to the bull call spread in payoff structure, but is slightly different from it in terms of execution. Instead of call options, put options are used in this strategy — hence the name bull "put" spread. Let's get into the details.

Bull Put Spread Setup

The bull put spread is one of four vertical spread options strategies available. It is an advanced options trading strategy that uses a low amount of capital to profit from a wide range of trading environments.

The bull put spread looks to profit from two options. The first option is bought at a lower strike price and expiration date, while the second is written with a higher strike price, but the same expiration date.