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Chapter 3. Vertical Spreads > Bear Put Ladder

3.8. Bear Put Ladder

ProficiencyDirectionVolatilityAsset LegsMax RiskMax RewardStrategy Type
+
    +   
AdvancedNeutralLow Volatility• Short PutUncappedCappedIncome
   • Short Put   
   • Long Put   


3.8.1. Description

The Bear Put Ladder is an extension to the Bear Put Spread. By shorting another put at a lower strike price, the position assumes uncapped risk potential if the stock plummets downwards. Again, the problem is that now it's not totally clear if we have a bullish or bearish strategy, so we have to designate it as a direction neutral strategy! We'd love the stock to fall to the middle strike price but not below the lower short put strike price. Anywhere in between the middle and higher strike is ideal.


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