Bear spread
In contrast to the bull spread, the bear spread is a bearish view and anticipates declining prices of the underlying. An investor sells a put with strike K1 and buys a put with higher strike K2.
Payoff bear spread:
In contrast to the bull spread, the bear spread is a bearish view and anticipates declining prices of the underlying. An investor sells a put with strike K1 and buys a put with higher strike K2.
Payoff bear spread: