The Bear Put Spread

Depending on how much you think the SPY will fall, you can position your “Spread” in three ways:

Aggression Level Strike Placement Goal Potential ROI
Conservative In-The-Money (ITM) Small move down or flat. Lower
Moderate At-The-Money (ATM) Move below current price. Balanced
Aggressive Out-of-The-Money (OTM) Major market crash. Highest

In our SPY $672/$668 example, we are Moderate. We bought the strike right at the current market price ($672), meaning we are positioned to profit from almost any downward movement.