Credit spread calculator
A credit spread pays you up front and caps your risk. Enter the two strikes and the net credit to see the most you can make, the most you can lose and where you break even at expiration.
New to this? Read Bull put spread max loss, explained.
Worked example
Example numbers
Bull put spread: sell 1 put at the $50 strike and buy 1 put at the $45 strike, same expiration, for a net credit of $1.20.
At expiration: stock at $52 → both puts expire worthless, +$120. Stock at $47 → the $50 put is worth $3, the $45 put is worth $0, so 1.20 − 3.00 = −$180. Stock at $44 or lower → −$380, the max loss.
Bear call version: sell the $55 call and buy the $60 call for $1.10. Max gain $110, max loss (5.00 − 1.10) × 100 = $390, breakeven 55 + 1.10 = $56.10.
How the math works
- Width = distance between the strikes.
- Max gain = credit × 100 × contracts (minus fees).
- Max loss = (width − credit) × 100 × contracts (plus fees).
- Breakeven = short strike − credit for a bull put, short strike + credit for a bear call.
Brokers usually hold about the max loss (width × 100 minus the credit) as buying power while the spread is open; check your broker for its exact requirement.
FAQ
What is the max loss on a credit spread?
The width between the strikes minus the credit you received, times 100 shares per contract. For a $5-wide spread sold for $1.20, that is (5 − 1.20) × 100 = $380 per contract, plus any fees.
What is the breakeven on a bull put spread?
The short (higher) put strike minus the net credit. Selling the $50/$45 put spread for $1.20 gives a breakeven of $48.80 at expiration.
What is the difference between a bull put and a bear call spread?
A bull put spread uses puts and makes its max gain if the stock stays above the short put strike. A bear call spread uses calls and makes its max gain if the stock stays below the short call strike. The max loss formula is the same for both.
Can I lose more than the max loss shown?
At expiration, with both legs still in place, the loss is capped at the number shown plus fees. Things can get messier if the short leg is assigned early, if you close one leg but not the other, or if the stock finishes between the strikes and only one leg is exercised. Ask your broker how they handle these cases.
Does the calculator include fees?
Only if you enter them. Put your total round-trip fees in the fees box; they are subtracted from the max gain and added to the max loss. Breakeven is shown before fees.
Educational only. This page explains order mechanics with example numbers. It is not investment advice, not a recommendation to buy or sell anything, and not a broker. Check your own broker’s rules, fees and assignment terms before you trade.