A put spread (psp) is the simultaneous purchase and sale of a put (long put and short put), with different strike prices but the same expiry date. The notional can be:
The same for both options.
In ratio, where the notional of the long put is in ratio to the notional of the short put. This is called a ratio put spread. For example a buyer of a 1 by 2 ratio put spread would buy 1 amount of the higher strike and sell twice the amount of the lower strike.
Why buy a put spread?
Buying a put spread lets you express a moderate bearish view on the underlying asset, by creating a trade with limited profit and limited risk.
You would put on a:
Bear put spread (buy a put with a higher strike and sell a put with a lower price) if you expected the underlying to fall.
Bull put spread (buy a put with a low strike and sell a put with a higher strike) if you expected the underlying to rise.
Pricing a put spread in SDX Commodities & Energy
You can only automatically enter into a put spread (psp) in the Single Option page. To price a put spread in the Portfolio page, you need to build it manually out of its individual components.