An option trading strategy which combines uncapped profit potential with a capped risk. Therefore, it suits times when volatility is expected to rise. This strategy involves selling an in-the-money put, buying an at-the-money or close-to-the-money put, and buying an out-of-the-money put.

The three put options should have the same underlying asset and expiration date. The bull put ladder has two breakeven points: one above the exercise price of the short put, while the other lies below the exercise prices of the two long puts. Therefore, large profits occur if the underlying’s price falls below the position’s lower breakeven level. Limited profits are expected in case the price rises above the position’s upper breakeven level. If the price remains between the exercise prices of the two long puts, the position suffers losses.

The bull put ladder is also called a short put ladder.