When the stock market falls [like we’ve experienced this past year], the majority of traders take their shot at making a profit from the drop.
But in most situations, simply shorting a stock or buying a put may seem too risky… and it’s one of the main reasons why traders turn to one options strategy called the bear put spread.
So, what is a bear put spread?
It’s an options strategy where a trader expects a moderate decline in the price of an asset or stock. In other words, investors use a bear put spread to hedge their position if they believe that a stock will fall a limited amount between the trade date.
And to use this strategy, you must buy one put option while simultaneously selling another… that means it helps to minimize your risk and reduce your chances of a loss.
Let’s take a look at a basic bear put spread in one particular stock that I’m trading and to demonstrate how you can maximize your profit while reducing risk.
If you like to trade the options market, then you need to see this…
There’s now an algorithm that searches the millions and millions of seemingly unconnected options trades to hunt hidden connections.
In other words, it’ll show you how to spot insider trades in real-time. That means when CEO’s or other C-level insiders make a bet… you’ll know all about it.