Sell a put below the price, buy a further one below that, and collect the difference. The setup people reach for when they are mildly optimistic. We ran it.
[One sentence. The answer, stated plainly, before any explanation. If the honest answer is "it depends," the verdict is Conditional and the condition is named here — not left to the reader to find.]
The bull put spread is the setup people reach for when they are mildly optimistic and do not want to be punished for being early. You sell a put below the current price and buy a further one below it, collecting the difference. If the stock rises, goes sideways, or even falls a little, the whole position expires worthless and you keep the credit.
The appeal is that you do not need to be right about direction — only about how far it will not fall. Advocates point to the high proportion of trades that win and to the fact that the maximum loss is known before you enter. Both of those things are true. Neither of them tells you whether the position makes money.
[What was held fixed, what was varied, and why those choices. Anything that would change the answer if chosen differently gets named here, not hidden.]
| Universe | — |
|---|---|
| Entry delta | — |
| Days to expiry | — |
| Exit rule | — |
| Assignment handling | — |
| Commissions & slippage | — |
| Period | — |
[The findings. Every number in this section comes out of the run — none are written by hand. If a figure cannot be traced to the run, it does not appear.]
A strategy can win most of the time and still lose money. What matters is expectancy — average profit per trade once the losses are counted at their real size. A high win rate with a negative expectancy means the wins are small, the losses are rare and large, and the account bleeds slowly enough that it feels like it's working.
Every verdict on this site is decided on expectancy. Win rate is reported because people ask for it, never because it decides anything.
[The rules were fixed on one part of the history and the verdict rests on a part the strategy had never seen. Both numbers go here, along with the distance between them. A verdict of Holds requires the out-of-sample result to stand on its own — a strong full-period figure is not enough on its own.]
| In-sample expectancy | — |
|---|---|
| Out-of-sample expectancy | — |
| Gap between them | — |
| Walk-forward windows | — |
| Variations tested | — |
[If there were too few trades to walk forward, this says so rather than leaving the row blank.]
[Most strategies are neither good nor bad — they are good under conditions and bad outside them. This section names the boundary: the delta, the regime, the tenor, or the rule that flips the verdict. If there isn't one, say so.]
[The honest limits. Survivorship, liquidity assumptions, fills that wouldn't have happened, regimes not covered by the sample, and anything else that would make a careful reader discount the result. Written before publication, not after someone complains.]
[The practical read. Not advice — the conclusion a person running this strategy should draw about their own version of it.]