The
Bear Put Spread is an options strategy that involves the purchase of a
Put Option with a higher strike and the selling of another
Put Option with a lower strike.
The sold put makes the strategy cheaper (compared to the purchase of a single put), while still allowing the investor to get a profit if the stock price decreases.
The disadvantage of a
Bear Put Spread (compared to a simple
Long Put position) is that the P/L of the strategy is limited.