Bull Put Spread Payoff Diagram: Sketch It Yourself

By Bruno Nalon · October 13, 2026 · 6 min read

A bull put spread payoff diagram maps your profit or loss at expiration for every stock price, so you can see max profit, max loss and breakeven before you place the trade. Below, you will sketch it yourself in five steps, pair it with a payoff table at each price level, and see exactly how the line shifts when you roll, close a leg or widen the strikes.

What does a bull put spread payoff diagram show?

The diagram is a picture of your profit or loss at expiration, plotted against the stock price. The horizontal axis is the stock price at expiration; the vertical axis is your dollar profit or loss. The line crosses zero at breakeven, which equals the short put strike minus the net credit you collected. Max profit is the credit; max loss is the width between the strikes minus the credit.

The trade has two legs: you sell one put at a higher strike and buy one put at a lower strike, with the same expiration and the same stock. The short put earns the credit; the long put caps your downside. Both strikes usually sit below the current stock price.

That is why the line is flat, then sloped, then flat again. Below the long strike, any further drop in the short put is offset by the long put, so the loss is capped and flat. Between the strikes, only the short put loses value as the stock falls, which creates the slope. Above the short strike, both puts expire worthless and you keep the full credit.

How to sketch the diagram in five steps

Take a worked example: sell the $95 put, buy the $90 put and collect a $1.50 credit. Put the stock price at expiration on the horizontal axis and profit per share on the vertical axis.

Step 1, mark the strikes: draw vertical dotted lines at $90 and $95. These are the only two prices where the shape changes.

Step 2, plot max profit: at any price above $95, both puts expire worthless and you keep the full $1.50 credit. Draw a flat line at +$1.50 from $95 to the right.

Step 3, plot max loss: below $90, the spread is worth $5 against you, so the loss is $5.00 minus the $1.50 credit, or -$3.50. Draw a flat line at -$3.50 from $90 to the left.

Step 4, connect the slope: draw a straight line from ($90, -$3.50) up to ($95, +$1.50). Every dollar the stock rises in that zone adds $1 per share of profit.

Step 5, label breakeven: the line crosses zero at $95 minus $1.50, or $93.50. Circle that point.

How to read the payoff table at expiration

Now suppose you sold a $90/$85 bull put spread for a $1.00 credit, or $100 per contract. The payoff table is just the diagram in numbers. Values are per contract at expiration: the put columns show what each leg is worth to you, and the net result is the credit plus both legs.

Each row is a point on the line: the flat segment above $90 is the constant credit, the slope between $90 and $85 is where every $1 drop costs $100, and the flat floor below $85 is max loss.

One wrinkle at the strikes: if the short put finishes even slightly in the money at expiration, you can be assigned 100 shares per contract. That is why most traders close spreads before expiration day instead of letting them settle.

Where are breakeven, max profit and max loss?

Breakeven equals the short strike minus the net credit. If you sold the $50 put in a $50/$45 spread and took in $1.00, breakeven is $49.00. Below $49 you lose money; above it, you profit. Breakeven sits to the left of the short strike because the credit gives you a cushion of exactly that $1.00.

Max profit is the credit itself: $1.00, or $100 per contract, earned anywhere above the short strike. Max loss is the strike width minus the credit: $5.00 minus $1.00, or $400 per contract, reached anywhere below the long strike. On the diagram, that is a flat line at +$100 on the right, a flat line at -$400 on the left, and a slope connecting them through breakeven. The same three points work for a bear call spread, just mirrored.

Before expiration vs at expiration

The diagram you sketched is the expiration line. Before expiration, the real profit-and-loss curve is bent, because both puts still carry time value. Between the strikes, the position usually shows a smaller loss than the expiration line, and above the short strike it shows less than the full credit. As time passes, the curve moves toward the expiration line.

Time decay, or theta, works in your favor as a credit spread seller. Many traders close or manage spreads around 21 days to expiration, when the remaining premium is small and sharp moves near the short strike start to matter more.

That is why you usually exit early instead of riding to max profit. Waiting for the last few dollars exposes you to a fast move through the short strike. Closing once the spread has lost most of its value locks in most of the decay with less risk.

How each adjustment redraws the diagram

Every adjustment redraws the same shape. Sketch the before line in pen and the after line in pencil, and you can see what the adjustment buys you and what it costs.

Rolling down and out means closing the current spread and opening a new one with lower strikes and a later expiration. On the diagram, the whole shape slides left to the new, lower strikes; the later expiration adds time value but does not change the expiration-day line. The credit from the roll adds to your total, but it rarely erases the loss already on the books.

Closing the long put turns the spread into a naked short put. The line stays flat at max profit above the short strike, then slopes down with no floor below it. Max risk is no longer defined, which is why beginners should avoid this adjustment.

Widening the strikes, by moving the long put further down, stretches the slope. You may collect a bit more credit, but the distance between the two flat lines grows: more cash at risk for a slightly lower breakeven.

When to adjust vs take the max loss

Use one simple rule: check where the stock is relative to the short strike, how many days are left, and how much of the credit remains. If the stock is above the short strike, take profit or let time work. If it has broken below the short strike with more than 21 days left and the position is not yet deep in the money, an adjustment can make sense. If it has broken below with little time left, closing for a defined loss is usually cheaper than any fix.

Be careful when an adjustment just adds risk. Rolling down or widening the strikes can turn one defined-risk trade into a bigger position at a worse price. If the new max risk exceeds the loss you originally planned to accept, it is a new trade, not a repair. Sketch both diagrams before you send the signal.

How trade alerts help you act on the diagram

A good alert gives you every piece of the diagram before you place anything: ticker, strikes, expiration, credit, max profit and max risk. You can sketch the payoff and check that it fits your account before you commit a dollar. What an alert cannot do is guarantee your fill or decide your exit for you.

EasyTrade sends defined-risk setups like the bull put spread with the max profit, max risk and a step-by-step execution guide up front. On the Diamond plan, spreads still open at 5 days to expiration are closed automatically. The honest gap: when the price moves against you earlier, no alert decides whether you roll, close or hold. That judgment stays yours, and the diagram is how you make it.

Frequently asked questions

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• Bull Put Spread vs Cash Secured Put: Which Should You Sell?
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• Interactive Brokers Bull Put Spread: Execution Guide
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