Options strategies › Bull Put Spreads on Momentum Stocks
Bull Put Spreads on Momentum Stocks
Credit Spread Strong Bullish Momentum
A bull put spread is a defined-risk credit trade placed below a rising stock: you keep the credit if it holds above your short strike, and the long put caps the loss if the trend breaks.
You expect an uptrending stock to stay above a support level.
Pillar 1 · Illustrative setup
How this example is built
Sell an out-of-the-money put and buy a further out-of-the-money put, opening for a net credit beneath the trend.
Illustrative inputs only — not live prices.
Open the on-device calculator →
Open the on-device calculator and enter your own strikes and premium — this exact math, with a Plus payoff table.
Pillar 2 · When & why
Why this fits Strong Bullish Momentum
Traders set the short strike beneath a support band (say a rising moving average) to sell premium into momentum with a known worst case. A common plan is to take profits around half the max gain rather than hold to expiration.
Maximum loss is the width minus the credit, well above the credit collected, and it happens if the stock drops below the lower strike. A momentum break or a flash crash is the risk.
Pillar 3 · Risk / reward
The defined-risk math
| Underlying price | Profit / loss |
|---|---|
| 155 | -$385.00 |
| 157.5 | -$385.00 |
| 160 | -$385.00 |
| 162.5 | -$135.00 |
| 165 | $115.00 |
| 167.5 | $115.00 |
| 170 | $115.00 |
Profit/loss at expiration — the same numbers the Quickwell calculator produces.