Bear Butterfly – Low Cost, High Precision Strategy

A Bear Butterfly is a low-cost bearish strategy designed to benefit when the stock expires near a specific level. It offers limited risk with higher potential reward, but accuracy is crucial. When to use: Use this strategy when you expect the stock to expire close to a particular downside level. Historic Example: In June 2022,

was expected to expire near ₹800. • Buy 820 Put @ ₹30 • Sell 2 × 800 Put @ ₹15 • Buy 770 Put @ ₹5 Profit & Risk: Upper Breakeven ≈ ₹815 Lower Breakeven ≈ ₹785 Max Profit ≈ ₹45 Max Loss ≈ ₹5 Key takeaway: Bear Butterfly delivers strong risk-reward when expiry lands near the target strike, but wrong positioning reduces gains quickly. 📌 Disclaimer: This content is for information only and not investment advice. Investments in securities market are subject to market risks. Read all the related documents carefully before investing. Please consult a SEBI-registered advisor before making any investment decisions.