When it comes to Options Trading, there are different complexities involved in terms of choosing a specific strategy that works the best for you.
At the same time, each strategy has its own set of advantages as well as limitations, thus making the concept of options trading even more challenging. Thus, in case you are looking to fit a particular strategy in your option trades, just check few areas before you make a choice.
In this detailed comparison of Bear Put Spread Vs Box Spread options trading strategies, we will be looking at the below-mentioned aspects and more:
- Current Market Position
- Your Risk Appetite
- Your Trading Experience
- Profit Potential
- Intention and Expectation of a trader
- Break-even point of your trade
Apart from the Bear Put Spread Vs Box Spread strategies, there are more than 25 comparisons of each of these strategies with other option strategies. With all these comparisons, you should be able to filter the ones that work the best for you.
Here is the detailed Bear Put Spread Vs Box Spread comparison:
| Comparison Aspect | Bear Put Spread | Box Spread |
| View |  |  |
| Strategy Introduction | Bear Put Spread is a type of vertical spread wherein buys a put option hoping to make a profit due to the market decline, and at the same time writes another put option with...more | Box Spread is an arbitrage strategy in which two complementary positions are taken that balance out the risk of each other. This makes the box spread an almost risk-free strategy...more |
| Investor Obligation | If the prices fall as expected, the trader can make profits and limit his losses, but if the prices fall far more than expected then the trader won’t be able to make any profit. | The trader has the obligation to keep the positions open till they reach their respective expirations. |
| Market Position | Moderately Bearish | Neutral |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Put | Call, Put |
| Number of Positions | 2 | 4 |
| Action Needed | Buy ITM Put, Sell OTM Put | 1 Long ITM Call, 1 Short OTM Call, 1 Long ITM Put, 1 Short OTM Put |
| Risk for You | Limited | None |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Strike Price of Long Put MINUS Net Premium | NA |
| Investor Intention | Let Put Options Expire Worthlessly | Choose the Correct Stike Prices |
| Investor Expectation | Market Prices to go Down | Short-term demand shifts of the options in the market. |
| Strategy Summary | Limit Your Losses | Complicated |
| Advantages | Limited Risk, Capped Losses | Risk Free, Direction Neutral |
| Disadvantages | Limited Profit | Limited Profit, High Margin Maintenance, Positions cannot be closed before expiry. |
| Market Scenarios - Profit | 1 | 2 |
| Market Scenarios - Loss | 2 | 0 |
| Also called as | NA | NA |
| More Comparisons | Bear Put Spread Vs Short Put | Box Spread Vs Short Put |
| Bear Put Spread Vs Long Combo | Box Spread Vs Long Combo | |
| Bear Put Spread Vs Synthetic Call | Box Spread Vs Synthetic Call | |
| Bear Put Spread Vs Long Put | Box Spread Vs Long Put | |
| Bear Put Spread Vs Long Call | Box Spread Vs Long Call | |
| Bear Put Spread Vs Covered Call | Box Spread Vs Covered Call | |
| Bear Put Spread Vs Covered Put | Box Spread Vs Covered Put | |
| Bear Put Spread Vs Protective Call | Box Spread Vs Protective Call | |
| Bear Put Spread Vs Short Box | Box Spread Vs Short Box | |
| Bear Put Spread Vs Long Call Condor | Box Spread Vs Long Call Condor | |
| Bear Put Spread Vs Short Call Condor | Box Spread Vs Short Call Condor | |
| Bear Put Spread Vs Box Spread | Box Spread Vs Short Call | |
| Bear Put Spread Vs Short Strangle | Box Spread Vs Short Strangle | |
| Bear Put Spread Vs Long Strangle | Box Spread Vs Long Strangle | |
| Bear Put Spread Vs Collar Strategy | Box Spread Vs Collar Strategy | |
| Bear Put Spread Vs Long Straddle | Box Spread Vs Long Straddle | |
| Bear Put Spread Vs Short Straddle | Box Spread Vs Short Straddle | |
| Bear Put Spread Vs Long Call Butterfly | Box Spread Vs Long Call Butterfly | |
| Bear Put Spread Vs Short Call Butterfly | Box Spread Vs Short Call Butterfly | |
| Bear Put Spread Vs Bear Call Spread | Box Spread Vs Bear Call Spread | |
| Bear Put Spread Vs Short Call | Box Spread Vs Bear Put Spread | |
| Bear Put Spread Vs Bull Call Spread | Box Spread Vs Bull Call Spread | |
| Bear Put Spread Vs Bull Put Spread | Box Spread Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Bear Put Spread Vs Box Spread option strategies.
At the same time, if you are in a neutral market situation and are looking for consistent but limited profits for your share market trades, then you can opt to go for the Box spread strategy.
At the same time, if you are looking to make some money from a market decline and can take some basic risk – then Bear Put Spread options strategy makes sense to you.
This needs to be known that the profit you get using both of these strategies is also limited in scope.
Furthermore, as told above, it also depends on the market situation.
In case you are looking to trade in options segment or share market in general, let us assist you in that. Just fill the form below and we will take you to the steps ahead.
