Bear Put Spread

Also known as a long put spread, an investor can use this strategy when they anticipate a drop in the market price. The investor creates the spread by purchasing put options (options but not obligations to sell at a certain price in a certain timeframe) at a specific strike price (basically sell price), while also selling the same number of puts with the same expiration date at a lower strike price.

The potential profit is the difference between the two strike options (minus the price at which the shares were originally purchased). By buying in equal portions, the investor limits their net risk (how much money they can lose).