What is the construction and market outlook for an investor executing a 'Bear Put Spread'?

[ A ]Buying a higher-strike Call and selling a lower-strike Call for an aggressive bull market.

[ B ]Buying physical gold bullion and selling crude oil futures.

[ C ]Buying a higher-strike Put option and selling a lower-strike Put option with the same expiry date, designed for a moderately bearish market outlook with capped cost.[ CORRECT ]

[ D ]Writing uncovered Call options with no downside protection.

Takeaway

A Bear Put Spread is constructed by buying a higher-strike put and selling a lower-strike put with the same expiry, designed for a moderately bearish outlook with the cost of entry reduced by the premium received from the short put.

Derivation

The investor buys the more expensive higher-strike put (which is more likely to finish in-the-money as the stock falls) and simultaneously sells a cheaper lower-strike put, collecting premium that partially offsets the cost of the long put — this reduces the net debit paid compared to buying the put outright, at the cost of capping maximum profit at the difference between the two strikes minus that net debit. This risk-defined structure suits an investor who expects the stock to decline but not collapse dramatically, since profit is capped once the stock falls below the lower strike anyway — distinguishing it from simply buying a naked put, which offers larger (though still capped-at-zero) profit potential at a higher upfront cost.

Why the others fail

A — Buying a higher-strike Call and selling a lower-strike Call for an aggressive bull market.

Buying a higher-strike call and selling a lower-strike call describes a Bear Call Spread's mirror-image bullish counterpart construction, not the put-based structure of a Bear Put Spread.

B — Buying physical gold bullion and selling crude oil futures.

Buying gold bullion and selling crude oil futures is an unrelated cross-commodity trade with no connection to constructing a defined-risk equity options spread using puts on the same underlying.

D — Writing uncovered Call options with no downside protection.

Writing uncovered call options carries unlimited upside risk and offers no defined-risk, moderately-bearish payoff profile — a materially different.