Introductory Context
"A masterclass on using 3-strike Put Butterfly spreads to target specific downward correction levels on Nifty with minimal capital risk."
Strategy Dossier & Taxonomy
Strategy: Long Put Butterfly (1-2-1 Put Spread) | Market: NSE Derivatives | Outlook: Bearish Target Pinning | Structure: Buy 1 Low Put + Sell 2 Mid Puts + Buy 1 High Put
1. The Core Principle in Plain English
A Long Put Butterfly operates identically to a Call Butterfly using Put options. It allows you to target a specific lower support level on the chart with maximum reward if the market lands right on that target.