Definitions for "BULL PUT SPREAD"
In the Trade Finder, a vertical credit spread using puts only. This is a net credit transaction established by buying a put and selling another put at a higher strike price, on the same underlying, in the same expiration. It is a directional trade where the maximum loss = the difference between the strike prices, less the credit, and the maximum profit = the credit received. Requires margin.
A strategy in which a trader sells a higher strike put and buys a lower strike put to create a trade with limited profit and limited risk. A rise in the price of the underlying increases the value of the spread. Net credit transaction; Maximum loss = difference between strike prices less credit; Maximum gain = credit; requires margin.
A spread designed to take advantage of rising asset prices by selling a put option with a high exercise price and buying one with a low exercise price.