Economics Options And Futures Questions
The bear put spread strategy is an options trading strategy that involves the purchase of put options with a higher strike price and the simultaneous sale of put options with a lower strike price. This strategy is used by traders who anticipate a moderate decrease in the price of the underlying asset. The goal of the bear put spread is to profit from the decline in the price of the underlying asset while limiting potential losses. By combining the purchase and sale of put options, the trader can reduce the cost of the trade and potentially increase the overall profitability.