From What's Trading:
A vertical put spread is plain vanilla strategy that can be initiated as a hedge or to make an outright bearish bet on the underlying stock, ETF, index, or futures contract. An example surfaced today in the iShares Australia Fund (EWA) and I’ll highlight the trade as an example of this 101 strategy. — sometimes called the bear put spread.
EWA is off 21 cents to $21.28 and an Oct 18 – 20 put spread trades on the ETF for 65 cents, 3125X, to open. In this strategy, the investor apparently bought 3125 October 20 puts on the the fund for $1.31 and sold 3150 October 20 puts at 66 cents. EWA shares are up 4.4 percent since Jun 4, when the ETF was probing an established support area around $20 per share. On June 5, EWA benefitted from news of a rate cut from Australia’s central bank and, on June 6, was also helped by data that showed Australia’s economy growing twice more than expected....MORE