Bullish Strategies- Put Bull Spread

Using Put



When to use:
When you are bullish on market direction and neutral on volatility.

A Put Bull Spread has the same payoff as the Call Bull Spread except the contracts used are put options instead of call options. Even though bullish, a trader may decide to place a put spread instead of a call spread because the risk/reward profile may be more favourable. This may be the if the ITM call options have a higher implied volatility than the OTM put options. In this case, a call spread would be more expensive to initiate and hence the trader might prefer the lower cost option of a put spread.