When your read is bullish… but you don’t need a rocket
Sometimes the price doesn’t need to take off. It’s enough that it doesn’t fall below a zone
the market has respected several times. That’s where the Bull Put Spread (also called a
put credit spread) makes sense: you design a structure that pays you up front and makes money
if the underlying rises, trades sideways or even dips a little without losing that key support. It’s a calm way to
“get bullish” without needing epic headlines.
In my case, I work and track it in ProRealTime v13:
clean charts, an options chain one click away and an Analyzer that draws the payoff profile
the moment I move strikes. Less noise, more focus.
What a Bull Put Spread is (without the unnecessary jargon)
The structure is born from two pieces: you sell a put below the current price (in the zone you think will hold)
and, to cap the risk, you buy another put even lower. Doing so brings a
net credit (the premium) into your account. Your maximum profit is precisely that premium; your maximum loss is capped
by the distance between strikes minus the credit collected. The position has positive theta (time helps you),
negative vega (it likes falling volatility) and a slightly bullish delta.
I like to picture it like this: you draw a “floor” with your puts. As long as the market respects that floor at expiration,
you keep the premium. If the price behaves better than expected, great; if it slips a little, you can still win.
A round number to lock in the idea
Imagine the underlying at 100. I sell the Put 95 and buy the Put 90. The market pays me, say,
€1.20 of net credit per contract. That means my maximum profit is €120 per contract if, at expiration,
the price trades at 95 or above. The maximum loss would be 5.00 − 1.20 = €3.80 (€380 per contract) if it ends below 90.
The breakeven sits at 95 − 1.20 = 93.80. All defined before you start.
From chart to order in ProRealTime v13
I open the underlying in ProRealTime,
mark on the chart the area where the support “shouldn’t” break, and pull up the options chain.
With the Bull Put template selected, I move the strikes as if I were placing chips:
the Analyzer instantly updates the payoff with maximum profit, maximum loss and breakeven.
If implied volatility is generous, all the better: the credit rises and the spread makes more sense.
On the confirmation ticket I review quantities, bid/ask and the margin required.
I almost always enter with a limit order aiming at the mid to scrape a few extra cents of premium; if liquidity is thin,
I’d rather not push it and prioritize execution. The idea is to let time work for me, not to fight over every tenth forever.
The context I look for
It works for me when I see clear supports, repeated rejection at a zone and a calm news flow.
Also when the market pulls back, reaches a serious technical reference (50/200 moving average, a former high) and “cushions”.
If implied volatility is high on top of that, it’s usually a good moment: I collect more for the same structure.
Managing it when the price presses lower
If the underlying accelerates against my sold zone and the read changes, I have three paths:
close and take a controlled loss, roll the spread to a later expiration to recover theta,
or shift the whole thing lower (keeping the distance between strikes) if the extra credit makes it worth it.
Before hitting the button I test it in the Analyzer of ProRealTime:
I move strikes, dates, see the exact new profile and decide with a cool head. Discipline here pays for itself.
Mental checklist (short, but important)
Are there earnings or a macro event before expiration? A dividend that could alter prices or assignments?
Is that “support” really support, or am I making it up? Does the premium justify the defined risk and the margin I tie up?
If I can answer those questions sensibly, then yes: I send the order and let time do its job.
Why I keep coming back to it
The Bull Put Spread lets me get paid today for backing a reasonable scenario: that the price respects a floor
for a few weeks. If the market goes along, the premium stays with me; if not, the loss is measured from the very first minute.
And the whole process —reading, building, managing and adjusting— I do without leaving
ProRealTime v13,
so the technique doesn’t steal my focus from the real protagonist: the price and its story.
