bear strategy PUT BACKSPREAD

Example: Sell 1 put;
buy 2 puts at lower strike
Market Outlook: Bearish
Risk: Limited
Reward: Limited, but substantial
Increase in Volatility: Typically
helps position
Time Erosion: Typically
hurts position
BEP: Two BEPs
1. Short put strike minus
premium received
2. Long put strike minus
[(difference between long put
strike and short put strike) minus
credit received]