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 Short Put 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 Short Put 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 Short Put Vs Bear Put Spread comparison:
| Comparison Aspect | Bear Put Spread | Short Put |
| 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 short put strategy is used when the investor is bullish towards the market and expects the prices to go up. He then sells the put option and makes a profit if...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. | Investor is obligated to sell the shares at the predetermined price, at the time of expiry, if the buyer of the put option chooses to exercise his option. |
| Market Position | Moderately Bearish | Bullish |
| Strategy Level Suitable for | Intermediates | Beginners |
| Options Traded | Put | Put |
| Number of Positions | 2 | 1 |
| Action Needed | Buy ITM Put, Sell OTM Put | Sell Put Option |
| Risk for You | Limited | Unlimited |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Strike Price of Long Put MINUS Net Premium | Strike Price MINUS Premium |
| Investor Intention | Let Put Options Expire Worthlessly | Let Options Expire Worthlessly |
| Investor Expectation | Market Prices to go Down | Prices go up sharply |
| Strategy Summary | Limit Your Losses | Complex & Risky |
| Advantages | Limited Risk, Capped Losses | Steady source of income till market remains bullish |
| Disadvantages | Limited Profit | High Risk, Limited Profit |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 2 | 2 |
| Also called as | NA | Naked Put or Uncovered Put |
| More Comparisons | Bear Put Spread Vs Short Put | Short Put Vs Long Put |
| Bear Put Spread Vs Long Combo | Short Put Vs Long Combo | |
| Bear Put Spread Vs Synthetic Call | Short Put Vs Synthetic Call | |
| Bear Put Spread Vs Long Put | Short Put Vs Short Call | |
| Bear Put Spread Vs Long Call | Short Put Vs Long Call | |
| Bear Put Spread Vs Covered Call | Short Put Vs Covered Call | |
| Bear Put Spread Vs Covered Put | Short Put Vs Covered Put | |
| Bear Put Spread Vs Protective Call | Short Put Vs Protective Call | |
| Bear Put Spread Vs Short Box | Short Put Vs Short Box | |
| Bear Put Spread Vs Long Call Condor | Short Put Vs Long Call Condor | |
| Bear Put Spread Vs Short Call Condor | Short Put Vs Short Call Condor | |
| Bear Put Spread Vs Box Spread | Short Put Vs Box Spread | |
| Bear Put Spread Vs Short Strangle | Short Put Vs Short Strangle | |
| Bear Put Spread Vs Long Strangle | Short Put Vs Long Strangle | |
| Bear Put Spread Vs Collar Strategy | Short Put Vs Collar Strategy | |
| Bear Put Spread Vs Long Straddle | Short Put Vs Long Straddle | |
| Bear Put Spread Vs Short Straddle | Short Put Vs Short Straddle | |
| Bear Put Spread Vs Long Call Butterfly | Short Put Vs Long Call Butterfly | |
| Bear Put Spread Vs Short Call Butterfly | Short Put Vs Short Call Butterfly | |
| Bear Put Spread Vs Bear Call Spread | Short Put Vs Bear Call Spread | |
| Bear Put Spread Vs Short Call | Short Put Vs Bear Put Spread | |
| Bear Put Spread Vs Bull Call Spread | Short Put Vs Bull Call Spread | |
| Bear Put Spread Vs Bull Put Spread | Short Put Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Put Vs Bear Put Spread option strategies.
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 this strategy is also limited in scope.
However, if your risk appetite is relatively high – then you can try Short Put although the profit potential in that strategy is limited.
Furthermore, as said 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.
