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 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 Short 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 Short Straddle Vs Bear Put Spread comparison:
| Comparison Aspect | Bear Put Spread | Short 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 | Using the short straddle strategy, the investor makes an upfront gain through the premiums collected by writing the call and put options. The investor expects that there...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 investor must hold strong views of the steadiness in the market to be involved in the short straddle. |
| Market Position | Moderately Bearish | Neutral |
| Strategy Level Suitable for | Intermediates | Experts |
| 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 | Unlimited |
| Profit Potential | Limited | Limited |
| 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 | Let Options Expire Worthlessly |
| Investor Expectation | Market Prices to go Down | No Market Movement |
| Strategy Summary | Limit Your Losses | Complex |
| Advantages | Limited Risk, Capped Losses | Profits in Zero Market Volatility Situation |
| Disadvantages | Limited Profit | Limited Profit, Unlimited Risk |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 2 | 2 |
| Also called as | NA | NA |
| More Comparisons | Bear Put Spread Vs Short Put | Short Straddle Vs Short Put |
| Bear Put Spread Vs Long Combo | Short Straddle Vs Long Combo | |
| Bear Put Spread Vs Synthetic Call | Short Straddle Vs Synthetic Call | |
| Bear Put Spread Vs Long Put | Short Straddle Vs Long Put | |
| Bear Put Spread Vs Long Call | Short Straddle Vs Long Call | |
| Bear Put Spread Vs Covered Call | Short Straddle Vs Covered Call | |
| Bear Put Spread Vs Covered Put | Short Straddle Vs Covered Put | |
| Bear Put Spread Vs Protective Call | Short Straddle Vs Protective Call | |
| Bear Put Spread Vs Short Box | Short Straddle Vs Short Box | |
| Bear Put Spread Vs Long Call Condor | Short Straddle Vs Long Call Condor | |
| Bear Put Spread Vs Short Call Condor | Short Straddle Vs Short Call Condor | |
| Bear Put Spread Vs Box Spread | Short Straddle Vs Box Spread | |
| Bear Put Spread Vs Short Strangle | Short Straddle Vs Short Strangle | |
| Bear Put Spread Vs Long Strangle | Short Straddle Vs Long Strangle | |
| Bear Put Spread Vs Collar Strategy | Short Straddle Vs Collar Strategy | |
| Bear Put Spread Vs Long Straddle | Short Straddle Vs Long Straddle | |
| Bear Put Spread Vs Short Straddle | Short Straddle Vs Short Call | |
| Bear Put Spread Vs Long Call Butterfly | Short Straddle Vs Long Call Butterfly | |
| Bear Put Spread Vs Short Call Butterfly | Short Straddle Vs Short Call Butterfly | |
| Bear Put Spread Vs Bear Call Spread | Short Straddle Vs Bear Call Spread | |
| Bear Put Spread Vs Short Call | Short Straddle Vs Bear Put Spread | |
| Bear Put Spread Vs Bull Call Spread | Short Straddle Vs Bull Put Spread | |
| Bear Put Spread Vs Bull Put Spread | Short Straddle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Straddle Vs Bear Put Spread option strategies.
At the same time, if you are an experienced trader and are in a neutral market situation, then Short Straddle is one of the options you can look out for.
There is a high amount of risk involved as well – thus, you have to be very sure of the point that the market has no volatility. Otherwise, stakes can be very high.
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.
Furthermore, as told above, it also depends on the market situation.
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