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 Bull Put Spread Vs Short Call Butterfly 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 Bull Put Spread Vs Short Call Butterfly 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 Bull Put Spread Vs Short Call Butterfly comparison:
| Comparison Aspect | Bull Put Spread | Short Call Butterfly |
| View |  |  |
| Strategy Introduction | Bull Put Spread comes into play when the trader is expecting the market is going up gradually, but moderately. So, this is also suitable for a moderately bullish forecast, just like the bull call option...more | Short Call Butterfly is the options strategy which is used when the trader expects a lot of volatility in the market. It is the opposite of the long call butterfly, in which the investor expects...more |
| Investor Obligation | Bull put spread is more ideal if the there is very high volatility in the market, time to expiration date is more and the market has declined considerably. | It is necessary that the strike prices of the in-the-money and out-of-the-money call options are equidistant from the at-the-money call options, and all the options have the same expiration date. |
| Market Position | Moderately Bullish | Neutral |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Put | Call |
| Number of Positions | 2 | 4 |
| Action Needed | Buy OTM Put, Sell ITM Put | 2 ATM, 1 ITM, 1 OTM Calls |
| Risk for You | Limited | Limited |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Strike price of short put MINUS net premium paid | Lower Break-even = Lower Strike Price + Net Premium Upper Break-even = Higher Strike Price - Net Premium |
| Investor Intention | Let Options Expire Worthlessly | Let Options Expire Worthlessly |
| Investor Expectation | Market Prices to Go Up | High Market Volatility |
| Strategy Summary | Limited Risk, Limited Gains | Profit in Unsure Market Situations |
| Advantages | Limited Risk | Limited Exposure, Low Investment |
| Disadvantages | Limited Profit | Low Returns, Requires Significant Market Movement |
| Market Scenarios - Profit | 3 | 1 |
| Market Scenarios - Loss | 2 | 1 |
| Also called as | NA | NA |
| More Comparisons | Bull Put Spread Vs Short Put | |
| Bull Put Spread Vs Long Combo | ||
| Bull Put Spread Vs Synthetic Call | ||
| Bull Put Spread Vs Long Put | ||
| Bull Put Spread Vs Long Call | ||
| Bull Put Spread Vs Covered Call | ||
| Bull Put Spread Vs Covered Put | ||
| Bull Put Spread Vs Protective Call | ||
| Bull Put Spread Vs Short Box | ||
| Bull Put Spread Vs Long Call Condor | ||
| Bull Put Spread Vs Short Call Condor | ||
| Bull Put Spread Vs Box Spread | ||
| Bull Put Spread Vs Short Strangle | ||
| Bull Put Spread Vs Long Strangle | ||
| Bull Put Spread Vs Collar Strategy | ||
| Bull Put Spread Vs Long Straddle | ||
| Bull Put Spread Vs Short Straddle | ||
| Bull Put Spread Vs Long Call Butterfly | ||
| Bull Put Spread Vs Short Call Butterfly | ||
| Bull Put Spread Vs Bear Call Spread | ||
| Bull Put Spread Vs Bear Put Spread | ||
| Bull Put Spread Vs Bull Call Spread | ||
| Bull Put Spread Vs Short Call |
Thus, with this, we wrap up our comparison of Bull Put Spread Vs Short Call Butterfly option strategies.
If you are in a moderately bullish forecast situation and want to take a limited risk, then Bull Put Spread is one of the options trading strategies you can look out for.
The profit you get using this strategy is also limited in scope.
At the same time, if you as a trader are expecting price movement (without any idea of the direction) within a neutral market momentum – then short call butterfly is an optimal strategy for you.
There is a limited amount of risk involved and you can expect limited profit only in this options strategy.
Furthermore, as told above, it also depends on the market situation.
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