Compare Trading Platform Bull Put Spread and Long Call Butterfly. Find similarities and differences between Bull Put Spread and Long Call Butterfly Trading Softwares. Find the most powerful trading platform. Find which trading software is better among Bull Put Spread and Long Call Butterfly.
| Bull Put Spread | Long Call Butterfly | |
|---|---|---|
 |  | |
| About Strategy | A Bull Put Spread (or Bull Put Credit Spread) strategy is a Bullish strategy to be used when you're expecting the price of the underlying instrument to mildly rise or be less volatile. The strategy involves buying a Put Option and selling a Put Option at different strike prices. The risk and reward for this strategy is limited. A Bull Put Strategy involves Buy OTM Put Option and Sell ITM Put Option. For example, If you are of the view that the price of Reliance Shares will moderately gain or drop its volatility in near future. If Reliance is currently trading at Rs 600 then you will buy an OTM Put Option at Rs 700 and a sell an ITM Put Option at Rs 550. You will make a profit when, at expiry, Reliance closes at Rs 700 level and incur losse...Read More | Long Call Butterfly is a neutral strategy where very low volatility in the price of underlying is expected. The strategy is a combination of bull Spread and bear Spread. It involves Buy 1 ITM Call, Sell 2 ATM Calls and Buy 1 OTM Call. The strike prices of all Options should be at equal distance from the current price. Suppose Nifty is currently trading at 10400. You expect very little volatility in it. You can implement the Long Call Butterfly by buying 1 ITM Call Option at 10300, selling 2 ATM Nifty Call Options at 10400, buying 1 OTM Call Option at 10500. Ensure that strike prices of Options are at equidistance. Your loss will be limited to the net premium paid on 4 positions while profit will be limited to strike price of short calls....Read More |
| Market View | Bullish | Neutral |
| Strategy Level | Advance | Advance |
| Options Type | Put | Call |
| Number of Positions | 2 | 4 |
| Risk Profile | Limited | Limited |
| Reward Profile | Limited | Limited |
| Breakeven Point | Strike price of short put - net premium paid |
| Bull Put Spread | Long Call Butterfly | |
|---|---|---|
| When to use? | This strategy works well when you're of the view that the price of a particular underlying will rise, move sideways, or marginally fall. | This strategy should be used when you're expecting no volatility in the price of the underlying. |
| Market View | Bullish When you are expecting a moderate rise in the price of the underlying or less volatility. | Neutral Neutral on the underlying asset and bearish on the volatility. |
| Action |
A Bull Put Strategy involves Buy OTM Put Option + Sell ITM Put Option. For example, If you are of the view that the price of Reliance Shares will moderately gain or drop its volatility in near future. If Reliance is currently trading at 600 then you will buy a OTM PUT OPTION at 700 and a sell a ITM PUT OPTION at 550. You will make a profit when at expiry Reliance closes at 700 level and incur losses if the prices fall down below the current price. |
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| Breakeven Point | Strike price of short put - net premium paid | Upper Breakeven = Higher Strike Price - Net Premium Lower Breakeven = Lower Strike Price + Net Premium |
| Bull Put Spread | Long Call Butterfly | |
|---|---|---|
| Risks | Limited Maximum loss occurs when the stock price moves below the lower strike price on expiration date. Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received Max Loss Occurs When Price of Underlying <= Strike Price of Long Put | Limited Risk in the Long Call Butterfly options strategy is limited to the net premium paid. |
| Rewards | Limited Maximum profit happens when the price of the underlying moves above the strike price of Short Put on expiration date. Max Profit = Net Premium Received | Limited Rewards in the Long Call Butterfly options strategy is limited to the adjacent strikes minus net premium debit. |
| Maximum Profit Scenario | Both options unexercised | Only ITM Call exercised |
| Maximum Loss Scenario | Both options exercised | All options exercised or all options not exercised. |
| Bull Put Spread | Long Call Butterfly | |
|---|---|---|
| Advantages | Allows you to benefit from time decay in profit situations. Helps you profit from 3 scenarios: rise, sideway movements and marginal fall of the underlying. | Profit earning strategy with limited risk in a less volatile market. |
| Disadvantage | Limited profit. Time decay may go against you in loss situations. | Premiums and brokerage paid on multiple position may eat your profits. |
| Similar Strategies | Bull Call Spread, Bear Put Spread, Collar |
