A bear put spread is created using two put options with the same expiration date by:

• Buying a put option with a higher strike price (here, $35) — this gives the right to sell at a higher price, which is more valuable when prices fall.
• Selling a put option with a lower strike price (here, $30) — this generates premium income but obligates the trader to buy at $30 if exercised.

This strategy profits when the underlying asset price decreases below the lower strike price. The maximum profit is the difference between the strikes ($35 − $30 = $5) minus the net premium paid, while the maximum loss is limited to the net premium paid. It is cheaper than an outright long put but caps the potential profit.