Bear Put Ladder

This is a vertical spread consisting of a long position in (usually) a close to ATM put option with a strike price K1, a short position in an OTM put option with a strike price K2, and a short position in another OTM put option with a lower strike price K3 . A bear put ladder is a bear put spread financed by selling another OTM put option (with the strike price K3). This adjusts the trader’s outlook from bearish (bear put spread) to conservatively bearish or even non-directional (with an expectation of low volatility).

K3 + K2 − K1 + H > max(H, 0)