Option Trading Strategies

Bear spread

Assuming B's current price is 300 and you are looking moderate bearish on B in the short term. The current month is May.

you can:

1) buy one contract of Jun 330 Put at $35, cost $3,500
2) sell three contract of Jan 230 Put at $11, gain $3,300

your cost is only $200.

1) if the stock price of B goes up to more than 330 before Jun, your long put contract will be worthless and the short position won't be exercised as well.
2) if the stock price of B remain close to 300 before Jun, you can sell the long contract for a price of around $30, then you have profile of $3000-$200 = $2800 immediately.
3) if the stock price of B goes below 300 before Jun, you will make money on the long position, if it is not goes below 230, the short put won't be exercised.