BA bull put spread: credit, risk, strikes
Headline-driven vol on an industrial balance sheet. IV stays elevated because the tail risk is genuinely fat — regulatory and safety news can reprice the stock 10% on a Tuesday with no earnings in sight.
A bull put spread sells the $190 put and buys the $180 put for protection, both expiring Oct 30. On BA at $198.07 that pays $267 up front against $733 of defined risk, with 69% probability of keeping the credit. It is the cash-secured put's capital-efficient cousin.
The October 30, 2026expiry this analysis was built on has passed, so the contracts quoted below no longer trade. The structure and the strike-selection logic still hold; the prices do not. Open the builder for today’s strikes on the real chain.
The trade, priced from the chain
33d to October 30, 2026| Leg | Qty | Price | Δ | IV | Cash |
|---|---|---|---|---|---|
| SellOct 30 $190 put | 1 | $4.50 | -0.31 | 35% | +$450 |
| BuyOct 30 $180 put | 1 | $1.83 | -0.16 | 36% | −$183 |
Every leg above is priced at the chain’s own quote — the identical number the builder will show you when you click through (last traded price), captured September 27, 2026 with a 15-minute delay. Only strikes whose print survives an implied-volatility check (within 20% of its own IV) and a no-arbitrage check across the ladder are priced here. Full methodology. Greeks, breakevens, max profit/loss and probability of profit are computed by OptionTracker’s engine at r = 4.2%. Educational analysis, not investment advice.
Yield on the capital this actually ties up
Annualized figures assume the same trade repeats every 33 days at the same premium. Nothing does. Use them to compare strikes and tickers, not to forecast a year.
How a bull put spread works
You are still selling downside — just not all of it. The long $180 put cuts the tail off below that level, which is why this needs $733 of buying power instead of the $19,000 a cash-secured put would tie up.
Above $190 at October 30, 2026, both puts expire worthless and you keep the full $267. Below $180, you lose the maximum $733. Breakeven is $187.33.
Return on risk is 36% for 33 days — 403% annualized. That headline is the reason people prefer spreads to cash-secured puts, and the reason spreads blow up accounts: the same capital supports several times the notional risk.
When it makes sense
- You are constructively bullish on BA but do not want to commit $19,000 of cash to a single short put.
- IV is rich — at 36% ATM, BA is the 12th richest of the 20 underlyings on this site — and you want to be short vega.
- You want a hard floor. The long wing turns an open-ended obligation into a known $733.
- You can name the price at which you would be happy to be wrong, and it is inside the structure rather than outside it.
Where the risk actually is
The risk is leverage, not the structure. $733 per spread is small; the temptation to sell ten of them because the buying power allows it is how a 69%-win-rate trade produces a losing year.
Early assignment on the short leg leaves you long 100 shares plus a long put — a synthetic call, not a disaster, but a position you did not choose and one that requires $19,000 of cash on Monday.
The structural problem with short premium is not the loss rate, it is the loss SIZE. A long run of small wins funded by an occasional large loss looks like skill on a monthly statement and like variance on a five-year one.
BA specifics: ladder, surface, and the implied move
The elevated implied vol on Boeing is not a mispricing waiting to be harvested; it is a market correctly charging for a distribution with a fat left tail and no calendar. Most short-premium frameworks assume the risk arrives on known dates and can be avoided by choosing an expiry. That assumption does not hold here, which is why the credits stay rich and why naked short premium is a poor idea on this name specifically.
BA's Oct 30 strikes are $5 apart near the money (2.52% of spot). That is a coarse ladder: one rung is a large fraction of the implied move, so precision on the short strike is an illusion. 6.3k contracts of open interest on Oct 30 is thin, and a structure that needs four separate fills will pay for it. 17 strikes on that expiry — 81% of the board — carry prints that agree with their own implied volatility and hold up across the ladder, and those are the strikes priced here. Adequate but not deep; the usable ladder is short, and wide condors here are wider than the book really supports.
Skew is inverted: the 25-delta CALL implies 1.6% more vol than the put. That is the market pricing upside risk above downside risk — a squeeze, a takeover rumour, or a crowded short. Selling calls into an inverted skew pays better than usual and is riskier than usual for exactly the same reason. The term structure is flat inside 1.5% between the two captured expiries, so there is no calendar edge to harvest and no event visibly priced into one month over the other.
At 36% ATM implied vol, the Oct 30 options are pricing a one-standard-deviation move of $21.24 over 33 days — roughly −10.7% to +10.7%, or $176.83 to $219.31. A short-premium structure here is a bet that 10.7% over 33 days is more than BA will actually use. That is the thesis, stated honestly.
The mistake this name punishes hardest: Assuming the risk lives on the earnings date. On Boeing it lives on every date.
Picking the strike on BA
Place the short strike on delta, then choose the width you can afford to lose. On BA at $198.07:
| Band | What it means | When it fits |
|---|---|---|
| 0.10 – 0.16 Δ short | Well below the market | High probability, thin credit. Needs strict sizing; the tail still exists.On BA: the Oct 30 $175 put at $1.24, 8% annualized |
| 0.20 – 0.30 Δ short | The standard credit-spread band | Credit ≈ 1/3 of width is the usual quality bar. Most spreads live here.On BA: the Oct 30 $185 put at $2.89, 17% annualized |
| 0.35 – 0.45 Δ short | Close to the money | Rich credit, frequent management. You are taking a real directional view.On BA: the Oct 30 $195 put at $6.35, 36% annualized |
| Width | Sets max loss per spread | Narrower = smaller risk per unit, worse credit/width ratio after fees. |
The live Oct 30 put chain below carries the deltas. Credit divided by width is the number to compare across strikes — anything under 25% is usually not worth the tail you're renting out.
The premium varies 24.2× across the nine strikes below. Everything the delta table is trying to tell you is visible in that gradient. Open interest concentrates at $195 on this expiry, which is usually where the fills are cleanest.
| Strike | vs spot | Mid | Δ | IV | % of strike | Ann. | OI |
|---|---|---|---|---|---|---|---|
| $170 | −14.2% | $0.62 | -0.07 | 37% | 0.4% | 4% | 107 |
| $175 | −11.6% | $1.24 | -0.11 | 37% | 0.7% | 8% | 358 |
| $180 | −9.1% | $1.83 | -0.16 | 36% | 1.0% | 11% | 225 |
| $185 | −6.6% | $2.89 | -0.22 | 34% | 1.6% | 17% | 319 |
| $190used | −4.1% | $4.50 | -0.31 | 35% | 2.4% | 26% | 364 |
| $195 | −1.5% | $6.35 | -0.40 | 35% | 3.3% | 36% | 515 |
| $200 | +1.0% | $9.00 | -0.50 | 36% | 4.5% | 50% | 241 |
| $205 | +3.5% | $11.03 | -0.60 | 34% | 5.4% | 60% | 132 |
| $210 | +6.0% | $15.00 | -0.70 | 32% | 7.1% | 79% | 142 |
BA puts expiring October 30, 2026· 15-min delayed capture · “Ann.” annualizes the mid as a percentage of the strike (the cash a cash-secured put sets aside) over 33 days.
Managing the position
- Set a stop at roughly 2× the credit. Credit spreads that go against you tend to keep going.
- Never let a tested spread ride into expiry week hoping for pin luck — assignment mechanics on one leg are messier than the loss you were avoiding.
- Duration beats delta for controlling risk. Selling a 45-day option and closing it at 21 days puts you in the flattest part of the gamma curve; selling a 7-day option at the same delta puts you in the steepest.
- Watch the extrinsic value on any short leg that goes in the money. When what is left is less than a dividend or a financing cost, exercise becomes rational for the person on the other side.
Common mistakes
Sizing on buying power instead of risk
$733 per spread times ten spreads is a real number. The margin requirement is not a risk limit.
Treating it as a cash-secured put
A CSP that goes wrong leaves you owning BA at a basis you chose. A put spread that goes wrong leaves you with $733 gone and no shares. Different trades, different plans.
Closing at $0.01 to keep the record clean
That penny is a commission and a distorted P/L history. If the option is genuinely worthless, let it expire and record the close at $0.00 — which is what happened.
BA bull put spread FAQ
What is the breakeven?
$187.33 — the short strike less the credit received. BA finishing anywhere above that at October 30, 2026 is a profit, with the full $267 kept above $190.
Can I be assigned before expiry?
Yes, on the short $190 put if it goes deep in the money — most likely around an ex-dividend date or in the final week. You would be long 100 shares and still hold the long put as protection until October 30, 2026.
Is BA option skew favouring puts or calls?
Calls. The 25-delta call implies 1.6% more volatility than the 25-delta put on the Oct 30 chain — an inverted skew, usually a sign of squeeze or event risk to the upside.
How wide are BA option strikes?
About $5 apart near the money on the Oct 30 expiry — 2.52% of the share price per rung. That sets how precisely you can place a short strike, and how granular a spread's width can be.
Build it yourself
Everything above is one construction at one moment. Open it in the builder to drag strikes along the ladder, scrub the expiry, and watch max profit, breakevens and probability of profit recompute live against the real BA chain — free, no account.
Related reading
- What a cash-secured put actually paysThe annualized-return column is the one everybody screenshots. It is also the one that tells you least. Here is the whole ladder — return, probability, breakeven, and the loss that takes six winners to repair.
- Strike selection with delta and IV"Sell the 30 delta" is the most repeated rule in retail options and nobody can tell you what it means. Here is what delta actually measures, where it stops matching probability, and how far off it gets on a high-IV name.
- The wheel strategy, with real numbersEveryone can recite the four steps. Almost nobody can tell you what a completed cycle returned on the capital it tied up. Here is one, priced off a real chain and folded by the same engine that runs our tracker.
Other BA strategies
- BA covered callSell upside on shares you already own and get paid for the cap.
- BA cash-secured putGet paid to place a limit order below the market.
- BA iron condorSell a range, buy the wings, collect if the stock stays put.
- BA bull call spreadBuy a call, sell a higher one — cheaper upside with a ceiling.
- BA long straddleBuy the call and the put — pay for a move in either direction.
- BA long strangleOTM call plus OTM put — cheaper than a straddle, needs more move.
- BA long callDefined-risk upside with a deadline attached.
- BA long putDefined-risk downside, or insurance with an expiry date.
- BA calendar call spreadSell the near-dated call, buy the far one — rent time twice.
Bull Put Spread on other tickers
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