Bearish strategy · Scenario Lab
Market outlook Moderately bearish
Long higher-strike put financed by short lower-strike put. Use the lab to see how the position responds before committing to a single forecast.
Scenario Lab
Move the underlying, clock, and implied volatility independently. Values before expiration use a Black–Scholes estimate; expiration values use intrinsic payoff.
The catalog’s default strikes and premiums are illustrative. No ticker lookup or market data is used.
| Underlying | Today | 30 days | 14 days | 7 days | Expiration |
|---|---|---|---|---|---|
| -15% — | — | — | — | — | — |
| -10% — | — | — | — | — | — |
| -5% — | — | — | — | — | — |
| 0% — | — | — | — | — | — |
| +5% — | — | — | — | — | — |
| +10% — | — | — | — | — | — |
| +20% — | — | — | — | — | — |
At expiration
Time value has gone to zero. IV no longer changes the result.
| Underlying | Move | P/L |
|---|---|---|
| — | -15% | — |
| — | -10% | — |
| — | -5% | — |
| — | 0% | — |
| — | +5% | — |
| — | +10% | — |
| — | +20% | — |
Model boundary: theoretical estimates use dividend-adjusted Black–Scholes for European exercise or a 100-step binomial estimate for American exercise. Fees, spreads, discrete dividend dates, early assignment behavior, and liquidity effects are excluded. Calculation, not advice.
Why this structure behaves this way
Net long delta-negative position financed as a debit spread. Theta works against the position early; gamma benefits a move toward the long put's strike as expiration nears.
This page uses the catalog’s illustrative default legs so you can compare direction, time, and volatility effects in one place. Edit the assumptions above to test a different starting point.