LONG PUT	SHORT PUT BUTTERFLY
About Strategy	Long Put Option Strategy This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future. Risk: The maximum loss will be the premium amount paid.< 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..

LONG PUT Vs SHORT PUT BUTTERFLY - Details

	LONG PUT	SHORT PUT BUTTERFLY
Market View	Bearish	Neutral
Type (CE/PE)	PE (Put Option)	PE (Put Option)
Number Of Positions	1	4
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Limited
Breakeven Point	Strike Price of Long Put - Premium Paid	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

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

	LONG PUT	SHORT PUT BUTTERFLY
Market View	Bearish	Neutral
When to use?	A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.	In Short Put Butterfly strategy, a trader is neutral in nature and expects the market to remain range bound in the near future.
Action	Buy Put Option	Sell 1 ITM Put, Buy 2 ATM Put, Sell 1 OTM Put
Breakeven Point	Strike Price of Long Put - Premium Paid	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

LONG PUT Vs SHORT PUT BUTTERFLY - Risk & Reward

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

LONG PUT Vs SHORT PUT BUTTERFLY - Strategy Pros & Cons

	LONG PUT	SHORT PUT BUTTERFLY
Similar Strategies	Protective Call, Short Put	Short Condor, Reverse Iron Condor
Disadvantage	• 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.	• 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	• Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.	• Benefits from time decay. • Traders can earn more in a rising or range bound scenario. • Benefits from a surge in volatility.