A Bear Put Spread can be applied when we expect markets to depreciate and trade within a range below the current price.
It is implemented by buying an at-the-money put option and selling an out-of-the-money put option, both with the same expiration date.
The maximum loss will be restricted to the net premium paid, while the profit will be capped at the difference between the bought and sold put strikes, less the net premium paid.
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