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 Long Strangle Vs Bear Put 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 Long Strangle Vs Bear Put 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 Long Strangle Vs Bear Put Spread comparison:
| Comparison Aspect | Bear Put Spread | Long Strangle |
| 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 | The long strangle strategy helps the trader to take advantage of the volatility in the market. It is a trend neutral strategy, so the trader does not need to be certain of the direction...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. | It is a trend neutral strategy, so the trader does not need to be certain of the direction of the price movement. |
| Market Position | Moderately Bearish | Neutral |
| Strategy Level Suitable for | Intermediates | Intermediates |
| Options Traded | Put | Call, Put |
| Number of Positions | 2 | 2 |
| Action Needed | Buy ITM Put, Sell OTM Put | One OTM Put, One OTM Call |
| Risk for You | Limited | Limited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Strike Price of Long Put MINUS Net Premium | Lower Breakeven Point = Strike Price of Put - Net Premium Upper Breakeven Point = Strike Price of Call + Net Premium |
| Investor Intention | Let Put Options Expire Worthlessly | Both call and put options expire worthlessly |
| Investor Expectation | Market Prices to go Down | Market Shows High Volatility |
| Strategy Summary | Limit Your Losses | Attractive |
| Advantages | Limited Risk, Capped Losses | Less Expensive, Limited Risk, Unlimited Gain |
| Disadvantages | Limited Profit | Price Movement has to be Big |
| Market Scenarios - Profit | 1 | 2 |
| Market Scenarios - Loss | 2 | 1 |
| Also called as | NA | NA |
| More Comparisons | Bear Put Spread Vs Short Put | Long Strangle Vs Short Put |
| Bear Put Spread Vs Long Combo | Long Strangle Vs Long Combo | |
| Bear Put Spread Vs Synthetic Call | Long Strangle Vs Synthetic Call | |
| Bear Put Spread Vs Long Put | Long Strangle Vs Long Put | |
| Bear Put Spread Vs Long Call | Long Strangle Vs Long Call | |
| Bear Put Spread Vs Covered Call | Long Strangle Vs Covered Call | |
| Bear Put Spread Vs Covered Put | Long Strangle Vs Covered Put | |
| Bear Put Spread Vs Protective Call | Long Strangle Vs Protective Call | |
| Bear Put Spread Vs Short Box | Long Strangle Vs Short Box | |
| Bear Put Spread Vs Long Call Condor | Long Strangle Vs Long Call Condor | |
| Bear Put Spread Vs Short Call Condor | Long Strangle Vs Short Call Condor | |
| Bear Put Spread Vs Box Spread | Long Strangle Vs Box Spread | |
| Bear Put Spread Vs Short Strangle | Long Strangle Vs Short Strangle | |
| Bear Put Spread Vs Long Strangle | Long Strangle Vs Short Call | |
| Bear Put Spread Vs Collar Strategy | Long Strangle Vs Collar Strategy | |
| Bear Put Spread Vs Long Straddle | Long Strangle Vs Long Straddle | |
| Bear Put Spread Vs Short Straddle | Long Strangle Vs Short Straddle | |
| Bear Put Spread Vs Long Call Butterfly | Long Strangle Vs Long Call Butterfly | |
| Bear Put Spread Vs Short Call Butterfly | Long Strangle Vs Short Call Butterfly | |
| Bear Put Spread Vs Bear Call Spread | Long Strangle Vs Bear Call Spread | |
| Bear Put Spread Vs Short Call | Long Strangle Vs Bear Put Spread | |
| Bear Put Spread Vs Bull Call Spread | Long Strangle Vs Bull Call Spread | |
| Bear Put Spread Vs Bull Put Spread | Long Strangle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison of Long Strangle Vs Bear Put Spread option strategies.
At the same time, if you are in a neutral market situation and are looking for unlimited profits from your share market trades, then you can opt to go for the Long Strangle strategy. Just remember, you need to be aware of the “right” strike prices for optimal gains.
However, 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 this strategy 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.
