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 Straddle 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 Straddle 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 Straddle Vs Bear Put Spread comparison:
| Comparison Aspect | Bear Put Spread | Long Straddle |
| 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 | Long Straddle comes into play when the trader expects the market to move sharply, however, the direction of the movement cannot be predicted. The purpose of the strategy to allow the traders to benefit from volatile markets...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 should be able to trade based on his/her conviction that the markets will move, without being concerned about the direction of the movement. |
| Market Position | Moderately Bearish | Neutral |
| Strategy Level Suitable for | Intermediates | Beginners |
| Options Traded | Put | Call, Put |
| Number of Positions | 2 | 2 |
| Action Needed | Buy ITM Put, Sell OTM Put | 1 ATM Call, 1 ATM Put |
| Risk for You | Limited | Limited |
| Profit Potential | Limited | Unlimited |
| Break Even Point for Investor | Strike Price of Long Put MINUS Net Premium | Lower Breakeven = Strike Price of Put - Net Premium Upper breakeven = Strike Price of Call + Net Premium |
| Investor Intention | Let Put Options Expire Worthlessly | Put & Call Options Expire Worthlessly |
| Investor Expectation | Market Prices to go Down | Sharp Market Movement |
| Strategy Summary | Limit Your Losses | Excellent & Simple |
| Advantages | Limited Risk, Capped Losses | Uni-Directional Profit, Unlimited Gains |
| Disadvantages | Limited Profit | High Premium |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 2 | 1 |
| Also called as | NA | NA |
| More Comparisons | Bear Put Spread Vs Short Put | Long Straddle Vs Short Put |
| Bear Put Spread Vs Long Combo | Long Straddle Vs Long Combo | |
| Bear Put Spread Vs Synthetic Call | Long Straddle Vs Synthetic Call | |
| Bear Put Spread Vs Long Put | Long Straddle Vs Long Put | |
| Bear Put Spread Vs Long Call | Long Straddle Vs Long Call | |
| Bear Put Spread Vs Covered Call | Long Straddle Vs Covered Call | |
| Bear Put Spread Vs Covered Put | Long Straddle Vs Covered Put | |
| Bear Put Spread Vs Protective Call | Long Straddle Vs Protective Call | |
| Bear Put Spread Vs Short Box | Long Straddle Vs Short Box | |
| Bear Put Spread Vs Long Call Condor | Long Straddle Vs Long Call Condor | |
| Bear Put Spread Vs Short Call Condor | Long Straddle Vs Short Call Condor | |
| Bear Put Spread Vs Box Spread | Long Straddle Vs Box Spread | |
| Bear Put Spread Vs Short Strangle | Long Straddle Vs Short Strangle | |
| Bear Put Spread Vs Long Strangle | Long Straddle Vs Long Strangle | |
| Bear Put Spread Vs Collar Strategy | Long Straddle Vs Collar Strategy | |
| Bear Put Spread Vs Long Straddle | Long Straddle Vs Short Call | |
| Bear Put Spread Vs Short Straddle | Long Straddle Vs Short Straddle | |
| Bear Put Spread Vs Long Call Butterfly | Long Straddle Vs Long Call Butterfly | |
| Bear Put Spread Vs Short Call Butterfly | Long Straddle Vs Short Call Butterfly | |
| Bear Put Spread Vs Bear Call Spread | Long Straddle Vs Bear Call Spread | |
| Bear Put Spread Vs Short Call | Long Straddle Vs Bear Put Spread | |
| Bear Put Spread Vs Bull Call Spread | Long Straddle Vs Bull Put Spread | |
| Bear Put Spread Vs Bull Put Spread | Long Straddle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Long Straddle Vs Bear Put Spread option strategies.
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.
However, 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 Straddle strategy.
There is a limited amount of risk involved as well, however, there are good chances of high profits if the strategy is executed well.
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.
