Bear Put Spread

Options Spreads Beginner-Friendly NIFTY BANKNIFTY FINNIFTY Stock Options

Moderately Bearish - expecting 2-4% downside

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Quick Reference

Strategy Type	Vertical Debit Spread - Bearish
Market Outlook	Moderately Bearish - expecting 2-4% downside
Risk Profile	Limited to Net Premium Paid
Reward Profile	Limited to Strike Width minus Premium
Time Horizon	15-45 days optimal
Capital Requirement	Rs.2,500 to Rs.10,000 per lot depending on width
Best Used When	Low IV environment with clear downside target and breakdown confirmation from support

When to Use This Strategy

Low IV environment with clear downside target and breakdown confirmation from support

Payoff Diagram

Profit ▲ │ Max │_____ Profit│ \ │ \ 0 ──┼───────\────────────────► Price │ \│ │ │ \ │ │ \───────│─────── Max │ A BE B Loss │ A = Lower Strike (Short Put) B = Higher Strike (Long Put) BE = Breakeven Point

India-Specific Notes

Trading Hours

Best Entry	9:30 AM - 10:30 AM (after opening volatility settles)
Avoid Entry	9:15 AM - 9:30 AM (high spreads), 3:15 PM - 3:30 PM (closing volatility)
Optimal Monitoring	11:00 AM - 2:00 PM (stable price action)

Expiry Behavior

Weekly Expiry	Thursday (NIFTY, BANKNIFTY, FINNIFTY)
Monthly Expiry	Last Thursday of month
Expiry Day Tips	Avoid holding spreads on expiry day - gamma risk is extreme • Exit by Wednesday 3:00 PM for weekly expiries • STT on ITM options exercised is 0.125% - can eat into profits • Pin risk: Price often gravitates toward max pain strike

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