STRAP	SHORT PUT BUTTERFLY
About Strategy	Strap Option Strategy  Strap Strategy is similar to Long Straddle, the only difference is the quantity traded. A trader will buy two Call Options and one Put Options. In this strategy, a trader is very bullish on the market and volatility on upside but wants to hedge himself in case the stock doesn’t perform as per his expectations. This strategy will make more profits compared to long straddle sin Read more..	Short Put Butterfly Option Strategy  In Short Put Butterfly strategy, a trader is neutral in nature and expects the market to remain range bound in the near future. A trader will buy 2 ATM Put Options; sell 1 ITM & 1 OTM Put Options. Here risk and returns both are limited. Risk:< .. Read more..

STRAP Vs SHORT PUT BUTTERFLY - Details

	STRAP	SHORT PUT BUTTERFLY
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	PE (Put Option)
Number Of Positions	3	4
Strategy Level	Beginners	Advance
Reward Profile	Profit Achieved When Price of Underlying > Strike Price of Calls/Puts + (Net Premium Paid/2) OR Price of Underlying < Strike Price of Calls/Puts - Net Premium Paid	Limited
Risk Profile	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts	Limited
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Upper Breakeven Point = Strike Price of Highest Strike Short Put - Net Premium Received, Lower Breakeven Point = Strike Price of Lowest Strike Short Put + Net Premium Received

STRAP Vs SHORT PUT BUTTERFLY - When & How to use ?

	STRAP	SHORT PUT BUTTERFLY
Market View	Neutral	Neutral
When to use?	This strategy is used when the investor is bullish on the stock and expects volatility in the near future.	In Short Put Butterfly strategy, a trader is neutral in nature and expects the market to remain range bound in the near future.
Action	Buy 2 ATM Call Option, Buy 1 ATM Put Option	Sell 1 ITM Put, Buy 2 ATM Put, Sell 1 OTM Put
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Upper Breakeven Point = Strike Price of Highest Strike Short Put - Net Premium Received, Lower Breakeven Point = Strike Price of Lowest Strike Short Put + Net Premium Received

STRAP Vs SHORT PUT BUTTERFLY - Risk & Reward

	STRAP	SHORT PUT BUTTERFLY
Maximum Profit Scenario	UNLIMITED	Net Premium Received - Commissions Paid
Maximum Loss Scenario	Net Premium Paid	Strike Price of Higher Strike Short Put - Strike Price of Long Put - Net Premium Received + Commissions Paid
Risk	Limited	Limited
Reward	Unlimited	Limited

STRAP Vs SHORT PUT BUTTERFLY - Strategy Pros & Cons

	STRAP	SHORT PUT BUTTERFLY
Similar Strategies	Strip, Short Put Ladder, Short Call Ladder	Short Condor, Reverse Iron Condor
Disadvantage	• To generate profit, there should be significant change in share price. • Expensive strategy.	• High risk strategy and may cause huge losses if the price of the underlying stocks falls steeply. • Higher profit is only possible when shares get close to expiration.
Advantages	• Limited loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.	• Benefits from time decay. • Traders can earn more in a rising or range bound scenario. • Benefits from a surge in volatility.