In the example above, the difference between the strike prices is 5.00 (100.00 – 95.00 = 5.00), and the net cost of the spread is 1.90 (3.20 – 1.30 = 1.90). Potential profit is limited to the difference between the strike prices minus the net cost of the spread including commissions. Profit is limited if the stock price falls below the strike price of the short put lower strike), and potential loss is limited if the stock price rises above the strike price of the long put (higher strike). A bear put spread is established for a net debit (or net cost) and profits as the underlying stock declines in price. Both puts have the same underlying stock and the same expiration date. A bear put spread consists of one long put with a higher strike price and one short put with a lower strike price.
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