Put Bear Spreads

What this video covers

• Why a put bear spread is a net debit position, and how selling the lower-strike put finances (but does not fully cover) the higher-strike put purchase
• The exact cause-and-effect chain: futures price falls, the higher-strike put gains faster than the lower-strike put, and the gap between the two put values widens toward the strike difference
• How to calculate maximum profit as (strike difference minus net debit), reached when the futures settles at or below the lower strike
• How to calculate maximum loss as the net debit paid, reached when the futures settles at or above the higher strike, so both puts expire worthless
• The breakeven formula: higher strike minus net debit, and why the market must drop exactly that far just to recover the upfront premium
• The sanity-check rule that maximum profit plus maximum loss always equals the strike difference, and how to use it to catch calculation traps on test day
• How all four verticals interlock by cash flow (debit spreads want the gap to widen, credit spreads want it to narrow) and by market direction (bullish and bearish each split into one debit and one credit)