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Bear Put Spread (Debit)
directional Capped lossAdvanced: a defined-risk bearish bet.
When to use it
Buy a put, sell a lower put. Profits if the stock falls; max loss is the net debit. Best in a confirmed downtrend.
Max profit
Strike width minus the debit paid.
Max loss
The net debit paid.
Payoff at expiry
illustrative shape — not to scale
■ profit zone
■ loss zone
X axis = stock price at expiry →
How it's built
Strikes shown low→high. Sell = collect premium · Buy = pay premium for protection or upside.
Hermes-evaluated setups
Best backtested per-ticker setups for this strategy. None currently clear our 80% conviction floor (common for directional / long-volatility structures, which win less often but pay more when they hit) — shown for completeness over ≥20 trades. Win rate is confidence-adjusted (95% lower bound); Avg P/L is per one-contract position.
| Ticker | Win Rate | Avg P/L / contract | Sharpe | Trades | DTE |
|---|---|---|---|---|---|
| LCID | 53% | +$157.00 | 1.6 | 31 | 30 |
| DIS | 59% | +$148.00 | 1.5 | 42 | 21 |
| ROKU | 61% | +$131.00 | 1.4 | 42 | 21 |
| SQQQ | 52% | +$124.00 | 1.0 | 30 | 30 |
| VXX | 70% | +$100.00 | 2.3 | 30 | 30 |
| ASML | 59% | +$98.00 | 0.9 | 42 | 21 |
| DE | 59% | +$95.00 | 1.0 | 42 | 21 |
| BABA | 59% | +$92.00 | 1.1 | 30 | 30 |
Backtested results are not a guarantee of future performance.