Outlook: Directional income. Taught in full in Lesson 22, Vertical spreads: defined risk, defined reward. This page is the reference card.
Illustration, not a recommendation. The strikes and premiums on this page are fixed teaching figures, not live quotes, and no strategy suits every account or every market. Read the full disclaimer.
Read this card in
What you must believe
The market stays away from a level through expiry: above the floor (bull put spread) or below the ceiling (bear call spread). Anything except a decisive move against you pays in full.
Construction
Bull put spread: sell the 24,800 PE at ₹90, buy the 24,600 PE at ₹40: credit ₹50 (₹3,250). Bear call spread: sell the 25,200 CE at ₹55, buy the 25,400 CE at ₹25: credit ₹30 (₹1,950). Both sold at the chain's canon walls.
The numbers, before entry
Max profit: the credit: ₹3,250 (put side) or ₹1,950 (call side)
Max loss: width minus credit: ₹9,750 and ₹11,050 respectively
Margin: near the defined max loss, roughly a tenth of the naked short's ₹1 to ₹1.5 lakh
Greeks profile
Mild delta toward the sold side, short gamma, long theta, short vega. The rent-collecting family: quiet days are earning days.
Realistic expectations
Roughly 70 to 75% win rates at 0.25-delta shorts, paying about 1 to collect while risking about 3. At fair pricing the expected value starts near zero; the edge must come from where you sell (behind walls and support) and when (elevated IV rank). Track expectancy, not the win streak.
Management rules
Close at 50 to 60% of max profit; redeploy instead of babysitting
Exit at twice the credit lost, or when the short strike is touched
Never through expiry day with spot near the short strike: the gamma coin-flip
With other strategies
Both sides together are the iron condor: the put spread and call spread on one ticket, rent from both walls (Lesson 24)
The debit spread is the same opinion at low IV: the master switch from Lesson 19 picks which family this week deserves
A backspread on the far side spends part of the credit on tail insurance: income with a crash airbag, for those who fear gaps
It is the cash-secured put's defined-risk understudy: same paid-to-wait logic at a twentieth of the capital, minus the shares at the end
Common mistakes
Selling credit for crumbs: ₹10 against ₹190 of width loses even at a 95% win rate
Holding a breached spread and hoping; the defined loss is a maximum, not a target
Selling both sides only when bored rather than when IV rank pays for it