Bull Put Spread Strategy: 80% Win Rate on IG Index (Tax-Free)

The high success rate of a Bull Put Spread comes from its massive Margin of Safety. Instead of needing the market to move in your direction to profit, you only need the market to avoid a specific “danger zone.”

Key Probability Factors:

The Buffer: By placing your strike price 4-5% below the current market, the index can drop significantly, and you still keep your full profit.
Statistical Edge: Using a 14-day expiry, the mathematical probability (Delta) typically shows an 80% chance that the market will finish above your protective floor.
Three Ways to Win: You profit if the market goes up, stays flat, or drops slightly.

Bull Put Spread Case Study: Trading the S&P 500 (US 500)

Let’s look at the math for a live setup on the US 500 (currently trading at 6962).

The Setup: Sell the 6700 Put (receive 12.23 pts) and Buy the 6600 Put (pay 8.10 pts).
Immediate Income: You receive a net credit of 4.13 points. At $5 per point, that is $20.65 deposited into your account instantly.
The Risk: Your maximum risk is capped at $479.35.
The Outcome: As long as the US 500 stays above 6700 for 14 days, you keep the $20.65 tax-free.

IG Index Margin Requirements for Bull Put Spreads

A common challenge on the IG Index platform is that it treats the two legs of your spread as separate trades.

What you need to know about IG Margin:

No Automatic Offset: Unlike traditional brokers, IG requires you to hold the full margin for the “Short Put” leg (approximately $1,500 per leg in our case study).
Capital Requirement: To place our $5/point US 500 trade, you would need roughly $3,000 in total margin available, even though your actual risk is less than $500.
Strategic Tip: Always check your “Available to Trade” balance before placing the second leg to ensure the platform doesn’t block the order.

How to Find Option Delta on IG Index (The Workaround)

Because IG Index does not display Delta or other Greeks on their spread betting tickets, you need a “Compass” to find your 80% win rate.

Step 1: Open a free tool like Yahoo Finance or CBOE to view the SPX Option Chain.
Step 2: Locate the strike price with a Delta between 0.15 and 0.20.
Step 3: Take that strike price back to IG to execute your high-probability spread.

Check out our partnership with IG.

Take Your Trading to the Next Level

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FAQ’s

Is options spread betting really tax-free?

Yes. In the UK and Ireland, spread betting is currently exempt from Capital Gains Tax and Stamp Duty. This makes it one of the most efficient ways to trade options strategies like the Bull Put Spread.

Can I trade US options in Euro on IG?

While you can fund your account in Euro, spread bets on US and UK options are typically executed in GBP or USD.

What happens if the market drops below 6700?

If the market finishes below your short strike (6700), you will begin to lose your credit. Your losses are fully capped once the market hits your long strike (6600).