COVERED PUT	SHORT PUT BUTTERFLY
About Strategy	Covered Put Option Strategy  This strategy is exactly opposite to Covered Call Strategy. Here the investor is neutral or moderately bearish in nature and wants to take advantage of the price fall in the near future. The trader will short one lot of stock future. Now the trader will short ATM Put Option, the option strike price will be his exit price. If the prices rally above the strike price, the Read more..	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..

COVERED PUT Vs SHORT PUT BUTTERFLY - Details

	COVERED PUT	SHORT PUT BUTTERFLY
Market View	Bearish	Neutral
Type (CE/PE)	PE (Put Option) + Underlying	PE (Put Option)
Number Of Positions	2	4
Strategy Level	Advance	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Futures Price + Premium Received	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

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

	COVERED PUT	SHORT PUT BUTTERFLY
Market View	Bearish	Neutral
When to use?	The Covered Put works well when the market is moderately Bearish.	In Short Put Butterfly strategy, a trader is neutral in nature and expects the market to remain range bound in the near future.
Action	Sell Underlying Sell OTM Put Option	Sell 1 ITM Put, Buy 2 ATM Put, Sell 1 OTM Put
Breakeven Point	Futures Price + Premium Received	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

COVERED PUT Vs SHORT PUT BUTTERFLY - Risk & Reward

	COVERED PUT	SHORT PUT BUTTERFLY
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	Net Premium Received - Commissions Paid
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	Strike Price of Higher Strike Short Put - Strike Price of Long Put - Net Premium Received + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Limited

COVERED PUT Vs SHORT PUT BUTTERFLY - Strategy Pros & Cons

	COVERED PUT	SHORT PUT BUTTERFLY
Similar Strategies	Bear Put Spread, Bear Call Spread	Short Condor, Reverse Iron Condor
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• 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.
Advantages	• Investors can book profit when underlying stock price drop, move sideways or rises by a small amount. • Able to generate monthly income. • Able to generate profit from fall in prices or mild increase in the prices.	• Benefits from time decay. • Traders can earn more in a rising or range bound scenario. • Benefits from a surge in volatility.