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 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 Short 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 Short Strangle Vs Bear Put Spread comparison:
| Comparison Aspect | Bear Put Spread | Short 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 short strangle options trading strategy is an excellent strategy to be deployed when the investor is expecting little to no volatility in the market...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. | If the prediction does not come out true, the strategy can cause unlimited loss. |
| Market Position | Moderately Bearish | Neutral |
| Strategy Level Suitable for | Intermediates | Experts |
| Options Traded | Put | Call |
| Number of Positions | 2 | 4 |
| Action Needed | Buy ITM Put, Sell OTM Put | 1 Short ITM Call, 1 Long ITM Call, 1 Long OTM Call, 1 Short 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 = Lower Strike Price + Net Premium Upper breakeven = Higher Strike Price - Net Premium |
| Investor Intention | Let Put Options Expire Worthlessly | Stock price remains between the 2 option Strike Prices and the options expire worthlessly |
| Investor Expectation | Market Prices to go Down | Little or No Market Volatility |
| Strategy Summary | Limit Your Losses | Profits in Stable Market |
| Advantages | Limited Risk, Capped Losses | Higher Range of Profit |
| Disadvantages | Limited Profit | Low Premium, Unlimited Risk |
| Market Scenarios - Profit | 1 | 1 |
| Market Scenarios - Loss | 2 | 1 |
| Also called as | NA | Credit Spread |
| More Comparisons | Bear Put Spread Vs Short Put | Short Strangle Vs Short Put |
| Bear Put Spread Vs Long Combo | Short Strangle Vs Long Combo | |
| Bear Put Spread Vs Synthetic Call | Short Strangle Vs Synthetic Call | |
| Bear Put Spread Vs Long Put | Short Strangle Vs Long Put | |
| Bear Put Spread Vs Long Call | Short Strangle Vs Long Call | |
| Bear Put Spread Vs Covered Call | Short Strangle Vs Covered Call | |
| Bear Put Spread Vs Covered Put | Short Strangle Vs Covered Put | |
| Bear Put Spread Vs Protective Call | Short Strangle Vs Protective Call | |
| Bear Put Spread Vs Short Box | Short Strangle Vs Short Box | |
| Bear Put Spread Vs Long Call Condor | Short Strangle Vs Long Call Condor | |
| Bear Put Spread Vs Short Call Condor | Short Strangle Vs Short Call Condor | |
| Bear Put Spread Vs Box Spread | Short Strangle Vs Box Spread | |
| Bear Put Spread Vs Short Strangle | Short Strangle Vs Short Call | |
| Bear Put Spread Vs Long Strangle | Short Strangle Vs Long Strangle | |
| Bear Put Spread Vs Collar Strategy | Short Strangle Vs Collar Strategy | |
| Bear Put Spread Vs Long Straddle | Short Strangle Vs Long Straddle | |
| Bear Put Spread Vs Short Straddle | Short Strangle Vs Short Straddle | |
| Bear Put Spread Vs Long Call Butterfly | Short Strangle Vs Long Call Butterfly | |
| Bear Put Spread Vs Short Call Butterfly | Short Strangle Vs Short Call Butterfly | |
| Bear Put Spread Vs Bear Call Spread | Short Strangle Vs Bear Call Spread | |
| Bear Put Spread Vs Short Call | Short Strangle Vs Bear Put Spread | |
| Bear Put Spread Vs Bull Call Spread | Short Strangle Vs Bull Call Spread | |
| Bear Put Spread Vs Bull Put Spread | Short Strangle Vs Bull Put Spread |
Thus, with this, we wrap up our comparison on Short Strangle 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.
At the same time, if you are in a neutral market situation and have a limited risk appetite, then Short Strangle is a potential option strategy for you. Generally, this strategy is suitable when you are sure that there is going to be low or no market volatility at all.
The strategy comes with a limited profit potential.
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