Definition of Put Spread

What is a Put Spread

A put spread is an options trading strategy that is created when an equal number of put option contracts are bought and sold simultaneously to hedge their positions. The spread strategy can be bullish (bull put spread) or bearish (bear put spread).

Glossary of Terms and Phrases

A financial dictionary or glossary is an essential tool to better understand the meaning of a specialized term or phrase. It would obviously make life much easier if everyone spoke the same language and used the same financial terms and phrases but that is not realistic.

We learn new languages to communicate with each other, transact business globally and to appreciate other cultures. Global finance is a specialized language that if understood and mastered, it will provide benefits that help to decrease risk and improve investment returns. Financial literacy is the foundation of developing good investment strategies and sound decision making.

Related Investment Terms

Bear Put Spread

Bull Put Spread

Put Option