Earn Safe Monthly Income: Bull Put Spreads with 115% ROI

What Is a Bull Put Spread?

If you’re new to options trading, the bull put spread is one of the most popular strategies for generating consistent income while keeping risk strictly limited. In plain English, a bull put spread—sometimes called a put credit spread—involves selling one put option and buying another put option at a lower strike price on the same expiration date. This combination allows you to collect premium upfront, with your maximum loss and gain clearly defined from day one.

Unlike many complex or speculative option plays, bull put spreads are designed for traders who prefer a more conservative, rules-based approach. When you expect the market (like the S&P 500) to stay above a certain level—or move up modestly—this strategy can be an effective way to earn income from time decay and stable prices.

Over the past 12 years, I’ve personally used bull put spreads as a core part of my trading systems, including in my Monthly Trend service. Monthly Trend is built specifically for beginners and risk-averse traders who want fully automated bull put spread signals on SPX, with a proven track record of 115.53% average annual returns and strictly capped downside.

In this guide, I’ll walk you step by step through how bull put spreads work, when to use them, and why many professionals rely on them to grow accounts steadily. If you’re serious about understanding options without taking reckless risks, you’re in the right place.

How a Bull Put Spread Works: Step by Step

At its core, a bull put spread is a credit spread strategy that earns you a premium when the underlying stays above your short strike price. Here’s how it works in simple steps:

1. Sell a put option at a higher strike price. This is where you collect premium upfront. This option obligates you to buy the shares (or settle cash if you’re trading SPX) if the price falls below this strike at expiration.
2. Buy a put option at a lower strike price. This acts as your insurance, capping the maximum loss if the market drops sharply.

The result is a net credit—money deposited into your account when you open the trade. Your profit comes from the options losing value over time (time decay) or staying out of the money as the underlying holds steady or rises.

Example: SPX Bull Put Spread

Let’s say SPX is trading at 5,200. You think it will stay above 5,150 over the next 30 days. Here’s how you might structure the trade:

• Sell the 5,150 put for $20.00 premium.
• Buy the 5,100 put for $15.00 premium.

Your net credit is $5.00 per share, or $500 per spread (since SPX options cover 100 units). If SPX stays above 5,150 at expiration, you keep the full $500. If SPX falls below 5,100, your loss is capped at $5,000 minus the credit received, or $4,500 per spread.

This defined risk and reward make bull put spreads an attractive alternative to selling naked puts, which can expose you to unlimited losses. You can learn more about how credit spreads work in our What Is a Credit Spread? guide.

When to Use a Bull Put Spread

While the bull put spread is a versatile strategy, it works best under certain conditions. You don’t need a strongly bullish outlook—in fact, this strategy can profit even if the market moves sideways. Here’s when many traders consider using it:

1. Moderately Bullish or Neutral Market

If you believe the underlying index or stock will stay above a specific level through expiration, a bull put spread can generate income without needing a big rally. This is why it’s so popular during stable periods when volatility is low to moderate.

2. Elevated Implied Volatility

Higher implied volatility increases option premiums. When you sell a put spread, you benefit by collecting more credit upfront. However, be careful—higher volatility also means prices can swing more dramatically. Always size your positions appropriately to keep risk controlled.

3. SPY vs. SPX Considerations

Many traders debate whether to use SPY or SPX options for bull put spreads. SPX options are cash-settled, European-style contracts, which means no early assignment risk. SPY options are American-style and can be exercised early, especially near expiration. You can read more about the differences in our SPY vs. SPX comparison guide.

In my experience over the past two decades, the most effective bull put spreads are placed when the market is stable, volatility is elevated but not extreme, and you have clear support levels identified on the chart.

Benefits and Risks of Bull Put Spreads

The bull put spread is popular because it combines the income potential of selling options with the safety net of limited risk. Let’s break down the main advantages and the risks you need to understand before trading.

Benefits

• Defined Risk: Unlike selling naked puts, your maximum loss is capped. You always know the worst-case scenario.
• Income Generation: By collecting premium upfront, you can create a steady stream of income in neutral or slightly bullish markets.
• Flexibility: Bull put spreads can be tailored to fit your risk tolerance and account size. You can choose strikes and expirations that match your outlook.
• Higher Probability of Profit: Because you don’t need a big rally—just for the underlying to stay above the short strike—many traders find this strategy has a higher win rate over time.

Risks

• Assignment Risk (for American-style options): If you trade SPY options, you could be assigned early, especially if the sold put is deep in the money close to expiration.
• Losses if the Market Drops Sharply: If the underlying falls below your long put strike, you’ll hit your max loss. That’s why sizing your positions is critical.
• Margin Requirements: Some brokers require margin to hold these positions, even though the risk is capped.

In my experience, the most common mistakes beginners make are placing spreads too close to the current price (which increases the chance of losses) and risking too much capital on a single trade. Always use a position size that fits your overall strategy and risk tolerance.

Case Study: SPX Bull Put Spread Performance

One of the most common questions I hear from new traders is, “Does this strategy really work over the long run?” I’ve been trading bull put spreads for more than 20 years, both manually and through automated systems. Over the past 12 years, my Monthly Trend service has delivered consistent results in a variety of market conditions.

Here’s a snapshot of our historical performance using SPX bull put spreads:

• Strategy: 1 SPX bull put spread trade per month
• Average Annual Return: 115.53%
• Historical Win Rate: 55%
• Risk per Trade: min. $500 per month (fully defined risk)
• Risk to Reward Ratio: 1:2
• Duration: 12 years of live performance data

This approach is designed for traders who want a simple, repeatable process without the emotional swings of day trading. Each trade is placed systematically, with automation available through our partnered brokers.

Important: Past performance does not guarantee future results. However, having real track records sets Monthly Trend apart from most signal services that only show hypothetical backtests.

Why Monthly Trend Is Different

There are plenty of trading signal services out there. Most of them promise the world but deliver little more than hype and generic alerts. Monthly Trend was built to be different—designed specifically for traders who want a consistent, fully transparent approach to bull put spreads.

• 12 Years of Proven Results: Unlike many services that rely on hypothetical backtests, Monthly Trend has documented real performance over more than a decade of live trading.
• Strictly Defined Risk: Every trade has a capped maximum loss, so you never face unlimited downside.
• Beginner-Friendly Setup: You don’t need years of options experience. If you can follow simple steps or connect to an automated broker, you’re ready.
• Automation Available: For traders who prefer a hands-off approach, Monthly Trend can be fully automated through our integration partners, saving you time and removing emotions from your trading.
• Real Support from an Experienced Trader: I’ve been trading options professionally for over 20 years, and I’m personally committed to helping you succeed.

If you’re tired of noisy chat rooms and unreliable signals, Monthly Trend offers a disciplined, data-backed approach with transparency you can trust.

How to Get Started with Monthly Trend

Joining Monthly Trend is simple. Whether you’re a complete beginner or an experienced trader looking for a more hands-off approach, you can be up and running in minutes.

1. Sign Up: Visit the Monthly Trend signup page and create your account.
2. Choose Your Risk Level: Most members start with $500 per month of defined risk. You can adjust this to fit your account size and comfort level.
3. Connect to Automation (Optional): If you prefer fully automated execution, connect your brokerage account to our platform through one of our trusted partners.
4. Start Receiving Signals: Each month, you’ll get a single SPX bull put spread trade with clear instructions—or have it placed automatically.

No complicated charts. No guesswork. Just a simple, consistent strategy you can rely on month after month.

Frequently Asked Questions

What happens if the spread expires in the money?

If SPX closes below your short strike at expiration, your bull put spread will be fully in the money. Because this is a defined-risk trade, your maximum loss is capped. In the Monthly Trend service, you always know your risk per trade in advance—usually set to $500 per spread.

Can I lose more than my defined risk?

No. That’s one of the biggest benefits of bull put spreads. When you open the trade, your maximum possible loss is locked in, so you’re never exposed to unlimited downside.

Is this strategy suitable for small accounts?

Yes. Because each trade has a clear cost and limited risk, you don’t need a large account to participate. Many Monthly Trend members start with as little as $500 risk per month and scale up over time.

How is Monthly Trend different from regular options alerts?

Most alert services just send you a text or email without any track record or accountability. Monthly Trend is based on 12 years of verified performance data and can be fully automated, so you don’t have to worry about missing trades or second-guessing entries.