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 Box Vs Bull 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
Intention and Expectation of a trader
Break-even point of your trade
Apart from the Short Box Vs Bull 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 Box Vs Bull Put Spread comparison:
Bull Put Spread comes into play when the trader is expecting the market is going up gradually, but moderately. So, this is also suitable for a moderately bullish forecast, just like the bull call option...more
Short Box involves selling a bull call spread along with a bear put spread, both at the same strike prices and expiration date, so that both the spreads balance each other out and create an arbitrage...more
Bull put spread is more ideal if the there is very high volatility in the market, time to expiration date is more and the market has declined considerably.
Recognize Put Call Parity distrubance as soon as possible and take positions to capture the movement.
Strategy Level Suitable for
1 Short ITM Call, 1 Long OTM Call, 1 Short ITM Put, 1 Long OTM Put
Number of Positions
Buy OTM Put, Sell ITM Put
Sell bull call spread along with a Bear put spread
Risk for You
Break Even Point for Investor
Strike price of short put MINUS net premium paid
Not Required, Almost No Risk/Loss
Let Options Expire Worthlessly
Take Positions at the right time and capture the profit.
Market Prices to Go Up
Profits generated from the strategy will be enough to compensate for the commissions and brokerages paid