Long Put Butterfly (Bearishly Positioned)
Construct a low-cost 1-2-1 Put Butterfly centered at a downside target to capture massive Risk:Reward returns if price drops to the target.
Interactive Payoff Curve & Greeks Simulation
Visualize the theoretical profit & loss at expiry vs T+0 immediate day curves. Drag the simulation slider to stress-test your trade.
Option Payoff Curve & Greeks
Net Option Greeks (Sensitivity Profile)
Values per 1 Lot standard unitMulti-Leg Position Structure (3 Legs)
| Action | Instrument / Strike | Type | Expiry | Approx Delta | Est. Premium | Qty Ratio |
|---|---|---|---|---|---|---|
| BUY | 24,300 PE (Upper Wing) | PUT | Monthly Expiry | -0.35 | ₹175 | 1x |
| SELL | 24,000 PE (Center Body) | PUT | Monthly Expiry | -0.20 | ₹70 | 2x |
| BUY | 23,700 PE (Lower Wing) | PUT | Monthly Expiry | -0.10 | ₹20 | 1x |
How the Structure Works
Combines a Bear Put Spread (24300/24000) and a Bull Put Spread (24000/23700).
A Bearish Put Butterfly places the peak body (2 short puts) directly at a downside support target (e.g. 24,000). If the market drops to the target, the strategy delivers an exceptional 1:4 to 1:6 R:R ratio for a tiny debit.
Institutional Strike Selection Rules
Phased Execution Blueprint
Follow this structured sequence to eliminate emotional hesitation during order entry, lifecycle management, and final exit.
Downside Target
Deploy when expecting a pullback to stall at specific support.
Interactive Margin & Position Size Calculator
Calculate exact lot sizing based on the 1-2% risk rule to preserve capital against Black Swan events.
Options Position Size & Max Risk Calculator
Total net liquid equity in your brokerage account
Recommended: 1.0% - 2.0% for disciplined longevity
Wing width max loss or defined mental/system SL
Rigorous Risk Rules & Adjustment Protocols
Non-negotiable parameters for stop-loss triggers, portfolio caps, and firefighting adjustments when market tests your strikes.
- Close when price hits center body.
Defined risk; minimal margin.
NIFTY Bearish Butterfly Trade Walkthrough
Targeted pullback to 24,000 support.
Bought 24300 PE / Sold 2x 24000 PE / Bought 23700 PE (Debit = ₹55 = ₹1,375)
- Nifty pinned at 24,020 on expiry.
Common Mistakes to Avoid
Why it happens: Greed.
Solution: Take profit when target is reached.
Institutional Pro Tips
Long Put Butterfly (Bearishly Positioned) FAQs
What is max loss?
The small net debit paid upfront.
Alternative & Complementary Strategies
Construct a low-cost 1-2-1 Call Butterfly centered at an upside target to capture high Risk:Reward returns if price hits the target zone.
Buy 1 lower wing, sell 2 center body, and buy 1 higher wing options for a small debit, targeting a pin at the center strike.
Buy a higher ATM Put and sell a lower OTM Put to reduce trade cost, neutralize theta decay, and capture defined-risk downside profits.