LONG PUT BUTTERFLY	COVERED PUT
About Strategy	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..	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..

LONG PUT BUTTERFLY Vs COVERED PUT - Details

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

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

	LONG PUT BUTTERFLY	COVERED PUT
Market View	Neutral	Bearish
When to use?	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.	The Covered Put works well when the market is moderately Bearish.
Action	Buy 1 OTM Put, Sell 2 ATM Puts, Buy 1 ITM Put	Sell Underlying Sell OTM Put Option
Breakeven Point	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	Futures Price + Premium Received

LONG PUT BUTTERFLY Vs COVERED PUT - Risk & Reward

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

LONG PUT BUTTERFLY Vs COVERED PUT - Strategy Pros & Cons

	LONG PUT BUTTERFLY	COVERED PUT
Similar Strategies	Iron Condors, Iron Butterfly	Bear Put Spread, Bear Call Spread
Disadvantage	• Risk is higher than reward. • When the underlying price is in between the two breakeven points, time decay hurts the position.	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.
Advantages	• Limited maximum loss. • Unlimited profit potential, risk only limited to loss of premium. • Benefits from low volatility.	• 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.