A put debit spread, also known as a bear put spread, is an options trading strategy where an investor simultaneously buys a put option and sells another put option with a lower
strike price on the same underlying security and expiration date.
Here’s how it works:
The trader buys a put option (the more expensive one) with a specific strike price.
Simultaneously, the trader sells another put option (the less expensive one) with a lower strike price.
The result is a net debit to the trading account, meaning the trader pays money to initiate the trade.
The goal is to profit from a decline in the underlying security’s price.
