An options-based strategy well-suited for NSE F&O markets. Leverages the unique characteristics of NIFTY and BANK NIFTY weekly options including time decay, volatility cycles, and expiry behaviour.
Complexity
Beginner
Easy to implement
NSE Suitability
High
5.2 / 10 score
Timeframe
Daily
Short to medium term
Best For
Beginner Traders
5–15 days moves
Indicators Used
1
Options Chain
Win Rate (Backtest)
66.7%
Above 50% threshold
Avg Return / Trade
+0.47%
Per trade, after costs
Max Drawdown
-1.2%
Within typical range
Trades / Year
6
Small sample — interpret with caution
About the Bull Put Spread Strategy
A Bull Put Spread is a net-credit options strategy that profits from either a rise in price or sideways movement within a defined range. The trader sells an out-of-the-money put option at a lower strike while simultaneously buying a put at an even lower strike, capping maximum loss while reducing the premium received. The strategy captures time decay working in the seller's favor as expiration approaches, particularly effective when implied volatility is elevated.
On NSE, this strategy benefits from consistent intraday and weekly expiration cycles with tight bid-ask spreads in liquid underlyings like Nifty50, Bank Nifty, and large-cap stocks. The market's tendency toward range-bound consolidation in specific timeframes creates predictable setups where the underlying is unlikely to breach the short strike. Indian equity options typically show measurable volatility spikes during macro events and earnings, allowing traders to establish spreads at favorable premiums.
The setup involves identifying support levels or fair-value zones where price has difficulty breaking lower, then selling puts slightly out-of-the-money while buying protective puts further below. Success depends on accurate strike selection and appropriate position sizing relative to the capital at risk.
Who This Strategy Is For
This Beginner strategy suits Beginner Traders comfortable with a Daily timeframe and holding periods around several days. It's built for the Equity segment on NSE, so it fits traders who can check positions without needing intraday execution speed. Because it uses a small, well-known set of indicators, it's a reasonable starting point if you're new to systematic NSE trading.
Equity Curve (Backtest)
HIGH QUALITY
Tested on: ASIANPAINT
· 2024-05-13 to 2026-06-30
Total Return
+2.8%
CAGR
1.5%
Sharpe Ratio
1.18
Sortino Ratio
1.77
Calmar Ratio
1.25
Win Rate
66.7%
NSE Market Fit
5OUT OF 10
Moderate Fit
This strategy is well-suited for current NSE market conditions.
Win rate quality Excellent
Risk-adjusted return Excellent
Drawdown control Excellent
Trade frequency (sample size) Needs Caution
Sharpe ratio Excellent
Monthly Returns Heatmap
2025
2026
Jan
—
-1%
Feb
—
—
Mar
0%
—
Apr
—
—
May
—
—
Jun
—
—
Jul
+1.2%
—
Aug
+1.4%
—
Sep
—
—
Oct
—
—
Nov
+1.2%
—
Dec
—
—
Positive return Negative return
Performance vs Nifty 50
Nifty 50 comparison isn't available for this backtest period yet.
Identify the market context — determine if conditions are trending or ranging, and confirm the higher timeframe direction
2
Wait for the specific entry signal defined by the strategy rules — do not enter without full confirmation
3
Execute with pre-defined stop loss and target — manage the trade according to the exit rules without discretionary override
Entry & Exit Rules
Risk Management Rules
Risk Per Trade
1.0%
of total capital
Min Capital
₹30,000
Hold Period
5–15 days
Segment
Equity, Futures
Common Mistakes to Avoid
⚠️ As with any systematic strategy, the most common mistake is deviating from the defined entry/exit rules mid-trade based on emotion rather than the backtested logic.
Full Backtest Report
Backtested on ASIANPAINT ·
2024-05-13 to 2026-06-30 ·
Capital ₹100,000
Equity Curve
Live tracking coming soon
We're building forward-tested, paper-trade tracking for this strategy so you can see how it performs
on live NSE data — not just historical backtests. Check back soon.
No sample trades added yet for this strategy.
Strategy Parameters
The exact rules and default values this strategy uses — adjust them when you run a full backtest.
Parameter
Default
Min
Max
Type
Description
short_strike_delta
0.30
0.15
0.50
decimal
Delta of short put strike to sell
width_points
100
50
500
integer
Distance between strikes in points
expiry_days
7
1
30
integer
Days to expiration at entry
max_loss_pct
2.0
0.5
5.0
decimal
Maximum loss allowed as % of capital
Frequently Asked Questions
A Bull Put Spread sells a higher strike put and buys a lower strike put for a net credit. It profits when the underlying stays above the short put strike at expiry. It is a defined-risk bullish strategy that earns premium without requiring the market to go up — it just needs to not go down significantly.
Sell a put 100-200 points below current market and buy a put another 100-200 points further down. For Bank Nifty at 46,000, sell 45,800 PE and buy 45,600 PE for a 200-point spread. Collect at least 40% of the spread width as credit. If you collect only ₹50 on a 200-point spread, the risk-reward is poor.
Maximum risk = spread width minus credit received. For a 200-point spread collecting ₹80 credit, max risk = (200-80) x 25 (Bank Nifty lot size) = ₹3,000. This maximum loss only occurs if the underlying closes below the lower strike at expiry. The defined risk makes this strategy suitable for retail traders.
Bull Put Spread when: (1) You want to profit from time decay rather than a directional move. (2) Implied volatility is high — you collect more premium. (3) You expect a sideways to slight up market. Buy a call when you expect a strong directional move and want unlimited upside. The put spread earns money even if the market does not rise.
Related Strategies
Looking for alternatives? 0DTE Options Strategy is a similar Intermediate strategy in the same Options category, with Very High NSE suitability.
MomentumIQ is an educational platform for strategy research and backtesting. We do not provide investment advice, recommendations, or tips. All backtest results are hypothetical, based on historical data, and for educational purposes only. Past performance is not indicative of future results. Backtested results may not account for brokerage, slippage, taxes, or other real-world costs. Please consult a SEBI-registered investment advisor before making any investment decisions.
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