When to use
Usually entered when market is near B and user expects a slight fall in the market but sees a potential for a sharp rise.  One of the most common spreads, seldom done more than 1:3 (two excess shorts) because of downside risk.

Profit Characteristics
Maximum profit, in amount of B - A - net cost of position (for put vs. put version), realized if market is at A at expiration.

Loss Characteristics
Loss limited on upside (to net cost of position in put vs. put) but open-ended if market falls.  Rate of loss, if market rises falls below A, is proportional to number of excess shorts in position.

Decay Characteristics
If market is at A, profit from option decay accelerate the most rapidly with passage of time.  At B, you have the greatest rate of loss accrual by decay of long option.

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