How it works: A bear put spread combines two puts to define potential downside protection and cost.
Important: Hedge size depends on exposure, option pricing and risk tolerance.
Sample: NIFTY Spot 22,520 · Buy 22,500 Put / Sell 22,000 Put · 1 lot (75 units).
Max Cost₹11,250 · ~3.75%
Max Protection₹26,250 · ~8.75%
Breakeven22,350
Protection Range22,500 → 22,000
Illustrative example only. Premiums, strikes, lot sizes and hedge effectiveness vary with market conditions.
Downside Protection · Bear Put Spread
$30K → 1 SPY hedge unit
How it works: Buy a higher-strike SPY put and sell a lower-strike SPY put to reduce hedge cost while keeping downside protection defined.
Important: As an illustrative planning example, use 1 × $15-wide SPY Bear Put Spread for each $30,000 of US portfolio exposure.
Sample: SPY at $670 · Buy $670 Put / Sell $655 Put · 1 contract (100 shares) · assumed net debit $4.50 per share.
Max Cost$450 · ~1.5%
Max Protection$1,050 · ~3.5%
Breakeven$665.50
Protection Range$670 → $655
Illustrative example only. SPY price, option premiums, strikes, contract terms and hedge effectiveness vary with market conditions.
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