SHORT PUT	LONG PUT BUTTERFLY
About Strategy	Short Put Option Strategy A trader will short put if he is bullish in nature and expects the underlying asset not to fall below a certain level. Risk: Losses will be potentially unlimited if the stock skyrockets above the strike price of put. Read more..	Long Put Butterfly Option Strategy  The Long Put Butterfly is a neutral strategy where a trader will be bearish on the volatility i.e. he thinks the market will have sideways kind of movement and will not rally sharply in either direction in the near future. This strategy involves sale of 2 ATM Put Options, buy 1 ITM and 1 OTM Put Option. The risk and reward are limited. Read more..

SHORT PUT Vs LONG PUT BUTTERFLY - Details

	SHORT PUT	LONG PUT BUTTERFLY
Market View	Bullish	Neutral
Type (CE/PE)	PE (Put Option)	PE (Put Option)
Number Of Positions	1	4
Strategy Level	Beginners	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Strike Price - Premium	Upper Breakeven Point = Strike Price of Highest Strike Long Put - Net Premium Paid, Lower Breakeven Point = Strike Price of Lowest Strike Long Put + Net Premium Paid

SHORT PUT Vs LONG PUT BUTTERFLY - When & How to use ?

	SHORT PUT	LONG PUT BUTTERFLY
Market View	Bullish	Neutral
When to use?	This strategy works well when you're Bullish that the price of the underlying will not fall beyond a certain level.	The Long Put Butterfly is a neutral strategy where a trader will be bearish on the volatility i.e. he thinks the market will have sideways kind of movement and will not rally sharply in either direction in the near future.
Action	Sell Put Option	Buy 1 OTM Put, Sell 2 ATM Puts, Buy 1 ITM Put
Breakeven Point	Strike Price - Premium	Upper Breakeven Point = Strike Price of Highest Strike Long Put - Net Premium Paid, Lower Breakeven Point = Strike Price of Lowest Strike Long Put + Net Premium Paid

SHORT PUT Vs LONG PUT BUTTERFLY - Risk & Reward

	SHORT PUT	LONG PUT BUTTERFLY
Maximum Profit Scenario	Premium received in your account when you sell the Put Option.	Strike Price of Higher Strike Long Put - Strike Price of Short Put - Net Premium Paid - Commissions Paid
Maximum Loss Scenario	Unlimited (When the price of the underlying falls.)	When Price of Underlying <= Strike Price of Lower Strike Long Put OR Price of Underlying >= Strike Price of Higher Strike Long Put
Risk	Unlimited	Limited
Reward	Limited	Limited

SHORT PUT Vs LONG PUT BUTTERFLY - Strategy Pros & Cons

	SHORT PUT	LONG PUT BUTTERFLY
Similar Strategies	Bull Put Spread, Short Starddle	Iron Condors, Iron Butterfly
Disadvantage	• Unlimited risk. • Huge losses if the price of the underlying stock falls steeply.	• Risk is higher than reward. • When the underlying price is in between the two breakeven points, time decay hurts the position.
Advantages	• Benefit from time decay. • Less capital required than buying the stock outright. • Profit when underlying stock price rise, move sideways or drop by a relatively small account.	• Limited maximum loss. • Unlimited profit potential, risk only limited to loss of premium. • Benefits from low volatility.