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 Call 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 Call 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 Call Spread comparison:
| Comparison Aspect | Bear Call Spread | Short Put |
| View |  |  |
| Strategy Introduction | The bear call spread consists of two calls, both with the same underlying asset and expiration date, but the strike price of the call options bought is less than the strike price of the same number of call options sold. Like most of the spread strategies, it is a limited-risk...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 | As a thumb rule, the expiration date must be about 30-45 days away in order to be able to take advantage of the accelerating time decay. | 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 | Call | Put |
| Number of Positions | 2 | 1 |
| Action Needed | Buy OTM Call, Sell OTM Call | Sell Put Option |
| Risk for You | Limited | Unlimited |
| Profit Potential | Limited | Limited |
| Break Even Point for Investor | Strike Price of Short Call + Net Premium Received | Strike Price MINUS Premium |
| Investor Intention | Let Options Expire Worthlessly | Let Options Expire Worthlessly |
| Investor Expectation | Market to go down gradually, but moderately | Prices go up sharply |
| Strategy Summary | Limited Risk Limited Profit | Complex & Risky |
| Advantages | Profit when Market is going down, Limited Risk | Steady source of income till market remains bullish |
| Disadvantages | Limited Profit | High Risk, Limited Profit |
| Market Scenarios - Profit | 2 | 1 |
| Market Scenarios - Loss | 1 | 2 |
| Also called as | NA | Naked Put or Uncovered Put |
| More Comparisons | Bear Call Spread Vs Short Put | Short Put Vs Long Put |
| Bear Call Spread Vs Long Combo | Short Put Vs Long Combo | |
| Bear Call Spread Vs Synthetic Call | Short Put Vs Synthetic Call | |
| Bear Call Spread Vs Long Put | Short Put Vs Short Call | |
| Bear Call Spread Vs Long Call | Short Put Vs Long Call | |
| Bear Call Spread Vs Covered Call | Short Put Vs Covered Call | |
| Bear Call Spread Vs Covered Put | Short Put Vs Covered Put | |
| Bear Call Spread Vs Protective Call | Short Put Vs Protective Call | |
| Bear Call Spread Vs Short Box | Short Put Vs Short Box | |
| Bear Call Spread Vs Long Call Condor | Short Put Vs Long Call Condor | |
| Bear Call Spread Vs Short Call Condor | Short Put Vs Short Call Condor | |
| Bear Call Spread Vs Box Spread | Short Put Vs Box Spread | |
| Bear Call Spread Vs Short Strangle | Short Put Vs Short Strangle | |
| Bear Call Spread Vs Long Strangle | Short Put Vs Long Strangle | |
| Bear Call Spread Vs Collar Strategy | Short Put Vs Collar Strategy | |
| Bear Call Spread Vs Long Straddle | Short Put Vs Long Straddle | |
| Bear Call Spread Vs Short Straddle | Short Put Vs Short Straddle | |
| Bear Call Spread Vs Long Call Butterfly | Short Put Vs Long Call Butterfly | |
| Bear Call Spread Vs Short Call Butterfly | Short Put Vs Short Call Butterfly | |
| Bear Call Spread Vs Short Call | Short Put Vs Bear Call Spread | |
| Bear Call Spread Vs Bear Put Spread | Short Put Vs Bear Put Spread | |
| Bear Call Spread Vs Bull Call Spread | Short Put Vs Bull Call Spread | |
| Bear Call Spread Vs Bull Put Spread | Short Put Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Put Vs Bear Call Spread option strategies.
As the name suggests, if you are looking at a slightly bearish market position and are open for a little risk, then bear call spread is something you can try in your trades. Having said that, the profit you can expect is going to be on a relatively limited level while using this strategy.
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.
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