Put Backspread

Psychology:

The put backspread involves the selling of an in-the-money put and then taking the premium from that and buying twice as many out-of-the-money puts. The time to use a put backspread is when you believe that the underlying asset’s share price is going to decrease significantly within a short amount of time.

Risk / Reward:

Maximum Loss: Limited to the price of the underlying asset’s exercise price equaling the price of the long put.

Maximum Gain: Unlimited