Credit Spread Calculator
Model a bull put or bear call spread in seconds. Enter your two strikes, the net credit and the number of contracts to see your max profit, capped max loss, breakeven and reward-to-risk — with a payoff diagram that shows exactly where your defined risk kicks in.
Sell the higher-strike put, buy the lower-strike put. Profits if the underlying stays above the short strike.
The net credit is what you receive up front, per share, after buying the protective long leg. Each spread covers 100 shares. Your risk is capped at the strike width minus the credit — this is a defined-risk trade.
Credit spread outcome
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How to use the calculator
- Choose the spread type — a bull put spread (neutral-to-bullish) or a bear call spread (neutral-to-bearish).
- Enter the short (sold) strike and the long (bought) strike. The gap between them is your strike width.
- Enter the net credit you receive per share and the number of contracts (each covers 100 shares).
- Read your max profit, max loss, breakeven and reward-to-risk — and see the profit zone and breakeven line on the chart.
How a credit spread caps your risk
A credit spread is a defined-risk options strategy where you sell one option and buy a further-out-of-the-money option of the same type and expiration. You collect a net credit up front. The option you sell is what earns you money; the option you buy caps your risk. Because both legs are fixed, you know your worst case before you ever place the trade — the strike width minus the credit received.
A bull put spread sells a higher-strike put and buys a lower-strike put; it profits when the underlying stays at or above the short strike. A bear call spread sells a lower-strike call and buys a higher-strike call; it profits when the underlying stays at or below the short strike. In both cases the most you can make is the credit, and the most you can lose is the width minus the credit — a fixed, known amount.
One structure worth knowing: an iron condor is simply two credit spreads at once — a bull put below the price and a bear call above it. You collect both credits and profit if the underlying finishes between the two short strikes. To model one, run each side here and add the results. These trades typically win often but risk more than they make on any single trade — which is exactly why you size them off the capped loss, never the credit.
Frequently asked questions
How do you calculate max profit and max loss on a credit spread?
Max profit is the net credit you receive: credit per share × 100 × contracts. Max loss is the strike width minus the credit, times 100 × contracts — where width is the distance between your two strikes. For example, a $5-wide spread taken for a $1.50 credit has a max profit of $150 and a max loss of $350 per contract. The credit must be smaller than the width, otherwise the trade math isn't valid.
What is the breakeven on a bull put vs a bear call spread?
For a bull put spread the breakeven is the short (sold) strike minus the credit — you profit as long as the underlying finishes above it. For a bear call spread the breakeven is the short strike plus the credit — you profit as long as the underlying finishes below it. This calculator marks the breakeven line right on the payoff diagram.
Is a credit spread a defined-risk trade?
Yes. Because you buy a protective long option further from the money, your loss is capped at the strike width minus the credit no matter how far the underlying moves. That is the key difference from selling a naked option, where the loss can be far larger. The calculator shows the exact capped figure so you always know your worst case before entering.
How does an iron condor relate to a credit spread?
An iron condor is simply two credit spreads on the same underlying at the same time — a bull put spread below the price and a bear call spread above it. You collect both credits and profit if the underlying stays between the two short strikes. To model one, run each side in this calculator and add the max profits and max losses together.
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Educational tool only — not financial advice. Options involve substantial risk and are not suitable for all investors. Nothing here promises a return. Also see our trading blog.