What is the bull put strategy?

BTCC, a leading cryptocurrency exchange, offers a range of services that cater to traders' needs. Among these services are spot trading, futures trading, and cryptocurrency wallets. The platform's spot trading feature allows traders to buy and sell cryptocurrencies at the current market price, while the futures trading option enables them to speculate on future price movements.

The bull put spread is a financial strategy utilized in options trading. It involves the execution of two simultaneous transactions: selling a put option and purchasing another put option with a lower strike price.

The key characteristic of this spread lies in the fact that both options have identical expiration dates. This ensures that the trader can manage their position effectively and efficiently as the expiration nears.

The purpose of the bull put spread is to profit from a moderate decline in the underlying asset's price, rather than a significant drop. By selling a put option with a higher strike price and buying one with a lower strike price, the trader is able to limit their downside risk while still benefiting from a downward movement in the market.

Additionally, the bull put spread can be used as a hedging tool to protect against potential losses in an existing long position. By selling the put option, the trader is essentially insuring against a drop in the asset's price, while the purchased put option provides additional flexibility and potential profit.