SHORT PUT BUTTERFLY	PROTECTIVE PUT
About Strategy	Short Put Butterfly Option Strategy  In Short Put Butterfly strategy, a trader is neutral in nature and expects the market to remain range bound in the near future. A trader will buy 2 ATM Put Options; sell 1 ITM & 1 OTM Put Options. Here risk and returns both are limited. Risk:< Read more..	Protective Put Option Strategy Protective Put Strategy is a hedging strategy where trader guards himself from the downside risk. This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside. He will buy one ATM Put Option to hedge his position. Now, if the underlying asset moves either up or down, the trader is in a safe position. Read more..

SHORT PUT BUTTERFLY Vs PROTECTIVE PUT - Details

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

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

	SHORT PUT BUTTERFLY	PROTECTIVE PUT
Market View	Neutral	Bullish
When to use?	In Short Put Butterfly strategy, a trader is neutral in nature and expects the market to remain range bound in the near future.	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Sell 1 ITM Put, Buy 2 ATM Put, Sell 1 OTM Put	Buy 1 ATM Put
Breakeven Point	Upper Breakeven Point = Strike Price of Highest Strike Short Put - Net Premium Received, Lower Breakeven Point = Strike Price of Lowest Strike Short Put + Net Premium Received	Purchase Price of Underlying + Premium Paid

SHORT PUT BUTTERFLY Vs PROTECTIVE PUT - Risk & Reward

	SHORT PUT BUTTERFLY	PROTECTIVE PUT
Maximum Profit Scenario	Net Premium Received - Commissions Paid	Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario	Strike Price of Higher Strike Short Put - Strike Price of Long Put - Net Premium Received + Commissions Paid	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Limited	Limited
Reward	Limited	Unlimited

SHORT PUT BUTTERFLY Vs PROTECTIVE PUT - Strategy Pros & Cons

	SHORT PUT BUTTERFLY	PROTECTIVE PUT
Similar Strategies	Short Condor, Reverse Iron Condor	Long Call, Call Backspread
Disadvantage	• High risk strategy and may cause huge losses if the price of the underlying stocks falls steeply. • Higher profit is only possible when shares get close to expiration.	• Value of protective put position decreases as time passes • Holding period of the protective put can be affected by the timing as a result tax rate on the profit or loss from the stock can be affected.
Advantages	• Benefits from time decay. • Traders can earn more in a rising or range bound scenario. • Benefits from a surge in volatility.	• Unlimited potential profit due to indefinitely rise in the underlying stock price . • This strategy allows you to hold on to your stocks while insuring against losses. • Hedging strategy, trader can guard himself from the downside risk.