Put spread

A put spread may be either a bull put spread or a bear put spread, depending on whether the investor expects the underlying price to rise or fall. In the case of a bull put spread, the exercise price of the option sold is higher than the exercise price of the option purchased; since the premium paid for the put option purchased is lower than the premium received for the option sold, the term credit put spread is also used. In the case of a bear put spread, the exercise price of the option sold is lower than the exercise price of the option purchased; since the premium paid for the put option purchased is higher than the premium received for the option sold, the term debit put spread is also used.