DaytradeTeam Brainzzzz

A Bull Put Spread is an options trading strategy with medium-level difficulty, and is designed to profit from stocks that are either stuck in a range or rising. The objective is to find an income-producing options trade that is bullish in nature with limited downside risk.

Here are the steps to Entering a Bull Put Options Trade--

1. Find a stock that you believe will be either range-bound or able to rise
2. Make the trade on the options that will expire in one month OR LESS
3. Buy Lower strike puts, $5 below the higher strike price
4. Sell the same number of higher strike puts that expire on teh same date...note that both puts should have strike prices that are LOWER than current stock price

Your goal should be to get a 12% net credit from the trade--for example if the spread between the two strikes is $10.00, your net credit for the trade should be at least $1.20. If the stock stays at current price or moves higher, the effect is that you will profit the net credit amount. Risk is limited to the difference between the strike prices minus the net credit for the complete option trade.